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Chapter 3 Review of the Logistics Status in Neighboring Countries

3.1 Seaborne Container Movements around Cambodia

3.1.1 Transit to/from

For Thailand, Laem Chabang is expected to play a substantial role as a gateway port for seaborne cargoes to/from Cambodia in the future. Lat Krabang ICD is also mentioned as it is recognized as an example of an ad hoc CY connected with the gateway port by rail.

(1) Shipping Lines’ Services

The shipping lines’ services currently calling at Laem Chabang Port are shown in Table 3.1 to 3.3 below. Currently 82 liner services are available at Laem Chabang Port. The maximum ship size is 10,062 TEU deployed in /West Coast .

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Table 3.1 Shipping Lines’ Services Calling at Laem Chabang Port (Part 1)

Ships Average Maximum Yearly Service Ship Slot Yearly Trade Lane Deplo Ship Size Ship Size Capacity Name Operator Charterer Calls yed (TEU) (TEU) (TEU) Pendulum G6 Alliance, SE Asia/F East (Asia‐ Emirates/Gol /WCNA/F East SE3/PSG NYK/Hanjin 52 12 6,738 8,180 350,393 WCNA‐Asia‐ dStar/Maers /SE Asia/M East M East) k/XPress SE Asia/F East Hapag G6 Alliance, Trans‐ NP1/PNX 52 7 9,091 10,062 472,725 /WCNA/F East /OOCL/ZIM PIL Pacific SE Asia/F East (WCNA) SE2 MOL G6 Alliance 52 7 8,237 8,560 428,331 /WCNA/F East Pendulum SE Asia/S G6 Alliance, (Asia‐Med‐ Asia/Med APL/Hapag AZX CMACGM, 52 11 7,492 8,750 389,575 ECNA‐Med ‐ /ECNA/Med/M /OOCL M East) East Around‐the‐ SE Asia/F World Pearl East/ECNA Rickmers 30 10 1,885 1,890 56,538 (Asia‐ECNA‐ String //Med Europe) Marsha East Africa SE Asia/E Africa Maersk 52 7 2,865 3,534 148,958 riki SE Asia/F East/S APG Evergreen Hyndai 52 7 8,480 8,480 440,960 Asia /M East Middle SE Asia/M MESA Maersk 52 7 4,225 4,500 219,715 East, Red Cosco/Ever CMACGM/Em Sea SE Asia/S Asia green/KLine irates/Hub/ AGI 52 5 4,218 4,250 219,315 /M East/S Asia /OOCL/Sim Maersk atech /WanHai SE Asia/F East/SE Asia/S SH1 MCC 52 5 2,212 2,300 115,024 Asia Emirates/Ha HLS NYK/Xpress 52 4 2,765 2,840 143,780 pag/Hyundai Advance/KLi South Asia MOL/NYK ne/OOCL/Sa SMX/TCS 52 4 2,703 2,840 140,530 SE Asia/S Asia /RCL/Xpress mudera/Sim atech MOL/NYK TCX 52 3 1,637 1,740 85,107 /Xpress Bang CMACGM 52 3 1,118 1,118 58,136 Feeder Source: MDS Transmodal “MDS Containership Database” as of August 2015.

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Table 3.2 Shipping Lines’ Services Calling at Laem Chabang Port (Part 2)

Ships Average Maximum Yearly Service Yearly Trade Lane Ship Operator Deplo Ship Size Ship Size Capacity Name Calls yed (TEU) (TEU) (TEU) IA2 MCC 52 4 2,137 2,600 111,124 VTX4 MCC/SITC 52 4 1,487 2,506 77,298 JTX CNC 52 4 2,088 2,762 108,550 JTP CNC/Hyundai/TS Lines 52 3 1,954 2,824 101,608 RBC CNC/RCL 52 3 1,888 2,740 98,159 CTS CNC/Cosco/YangMing 52 4 1,852 4,360 96,317 CBW MOL 52 3 3,339 4,578 173,645 RBC4 MOL/RCL 52 3 2,649 4,380 137,765 CBE MOL 52 3 1,662 1,710 86,441 JTV APL 52 3 1,907 2,840 99,147 JT2 APL/YangMing 52 3 1,879 2,496 97,691 PHX1 NYK 52 3 3,193 4,578 166,019 PHX2 NYK 52 3 2,733 4,250 142,099 RBH NYK/RCL 52 2 1,380 1,700 71,760 CSS OOCL 52 4 1,263 1,626 65,663 KTX2 OOCL 52 4 2,138 2,825 111,163 NPS OOCL 52 4 1,410 2,478 73,294 CVT OOCL/WanHai 52 4 1,818 2,959 94,536 JABCO1 KLine/SITC 52 3 1,716 1,740 89,232 JABCO2 KLine/SITC 52 4 1,817 2,474 94,471 TWT Evergreen 52 2 2,018 2,540 104,936 LKX Evergreen 52 2 1,380 1,700 71,760 Intra‐ SE Asia JTC YangMing 52 4 1,525 2,468 79,274 Asia /F East NTS Hanjin/KMTC 52 3 2,000 2,500 104,000 CSE Hanjin/KLine/PIL 52 4 1,613 2,490 83,876 RBC2 Cosco/RCL 52 3 2,819 4,578 146,571 CVT CSCL 52 5 1,368 1,368 71,136 JST WanHai 52 4 1,670 2,950 86,814 NTE WanHai 52 4 1,533 2,770 79,690 JTT WanHai 52 4 1,410 1,726 73,307 VTX2 SITC 52 4 2,247 2,742 116,844 CPX3 SITC 52 3 1,502 1,705 78,087 CKV SITC 52 5 1,448 2,090 75,296 VTX1 SITC 52 5 1,229 1,368 63,908 KTS KMTC 52 3 2,087 3,380 108,507 CHT KMTC/TS Lines 52 3 1,263 1,700 65,693 NTX CKL/Namsung/Dongjin 52 3 2,321 2,664 120,709 Viet2/KVT CKL/Namsung 52 3 2,867 4,250 149,067 VTS CKL/KMTC/Sinokor 52 3 1,990 2,730 103,480 CVX GoldStar 52 4 1,555 2,468 80,873 ANX GoldStar/KMTC/Sinokor 52 4 1,456 1,645 75,699 JHT TS Lines 52 4 1,894 4,360 98,475 BHS HeungA 52 3 2,167 2,740 112,667 KCT HeungA/KMTC/TSL 52 3 1,733 1,800 90,133 SEAFN Gemadept 52 1 1,800 1,800 93,600 Source: MDS Transmodal “MDS Containership Database” as of August 2015.

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Table 3.3 Shipping Lines’ Services Calling at Laem Chabang Port (Part 3)

Ships Average Maximum Yearly Service Yearly Trade Lane Ship Operator Deplo Ship Size Ship Size Capacity Name Calls yed (TEU) (TEU) (TEU) TR1 MCC 52 3 1,482 1,708 77,064 Thai Exp MSC 52 1 1,700 1,700 88,400 Thai Exp 2 MSC 52 1 1,800 1,800 93,600 Thai Feeder CMA CGM 52 3 2,029 2,546 105,491 RTI MOL/RCL 52 2 1,700 1,700 88,400 MSS MOL/RCL 52 2 1,700 1,700 88,400 APX NYK 52 2 2,125 2,550 110,500 ASECO‐S KLine 52 1 1,850 1,850 96,200 TJS KLine/WanHai 52 2 1,700 1,700 88,400 TMI Evergreen 52 2 1,775 1,850 92,300 SEA YangMing 52 2 1,750 1,800 91,000 Intra‐ SE Asia BKX2 Cosco/Samudera 52 2 1,700 1,700 88,400 Asia Regional BKX1/NVS Samudera 52 3 1,782 2,500 92,681 BKX3 Samudera 52 2 2,200 2,550 114,400 TSX XPress 52 1 1,900 1,900 98,800 TSX2 XPress 52 1 1,800 1,800 93,600 MTS GoldenSea 52 3 2,145 2,824 111,523 VTS GoldStar/GoldenSea/OOCL 52 3 1,839 2,700 95,645 RTS2 RCL 52 1 1,900 1,900 98,800 Nusantara2 SITC 52 1 1,800 1,800 93,600 BKS Advance 52 2 1,700 1,700 88,400 VOSCO VOSCO 52 2 2,550 2,550 132,600 TVS Vinalines 52 1 1,800 1,800 93,600 Total 82 services 4,242 289 2,910 10,062 9,921,273 Source: MDS Transmodal “MDS Containership Database” as of August 2015

(2) Traffic of Transit Containers to/from Cambodia

Some export seaborne “transit” containers from Cambodia are moving through Laem Chabang Port. The commodities are mostly the garments produced at the factory located in Sisophon, and agricultural products from the areas close to the Thai-Cambodia border. As the ASEAN Economic Community (AEC) was officially established in December, 2015, the volume of export transits from those areas is expected to grow in future keeping pace with the increase of investments into the area by Thai companies. In that event, Laem Chabang Port will strengthen its presence as the gate port of the western region of Cambodia.

The import transit containers were not identified in this study, while some “local”

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cargoes stuffed in marine containers were recognized to be moving between Cambodia and Thailand. On that traffic, marine containers may be used just for the convenience of carrying cargoes in “waterproof” or “intact” conditions.

3.1.2 Transit to/from

For Vietnam, Cai Mep Port and Ho Chi Minh Port are reviewed. ICDs in Ho Chi Minh are also mentioned as they are recognized as an example of an ad hoc CY connected with the gateway port by barge.

(1) Shipping Lines’ Services

The shipping lines’ services currently calling at Cai Mep Port are shown in Table 3.4 below. Currently eight weekly liner services are available at Cai Mep Port. The maximum ship size is 10,100 TEU deployed in the Asia/Europe mainline.

Table 3.4 Shipping Lines’ Services Calling at Cai Mep Port

Ships Average Maximum Yearly Service Ship Slot Yearly Trade Lane Deploy Ship Size Ship Size Capacity Name Operator Charterer Calls ed (TEU) (TEU) (TEU) SVS MOL Trans‐ G6 Alliance 52 11 6,714 7,024 349,128 SE Asia/ECNA/SE Asia /AUE3 /Evergreen Pacific /Far East (ECNA) Z7S Zim OOCL 52 10 5,775 8,440 300,295

Trans‐ SE Asia/Far East Pacific SE2 MOL G6 Alliance 52 7 8,237 8,560 428,331 /WCNA/Far East (WCNA) Pendulum Maersk TP2 2M Alliance 52 15 7,976 9,418 414,731 (WCNA‐ SE Asia/Far East /MSC Asia‐ /WCNA/Far East /SE Asia CKYHE/CMA MD1 COSCO Mediterra /Mediterranean CGM 52 16 9,996 10,110 519,773 /PM1 /Hanjin nean） /CSCL/UASC SE Asia/Red Sea EUA Europe /Europe/SE Asia /Far MOL /NYK G6 Alliance 52 11 9,280 10,100 482,569 /LP1 East MCC SE Asia/Far East IA9 52 4 1,678 1,740 87,256 Transport Intra‐Asia Hapag Lloyd /HeungA SE Asia/Far East CBW MOL 52 3 1,050 1,060 54,600 /Interasia /Wan Hai Total 8 services 416 77 7,510 10,110 2,636,683 Source: MDS Transmodal “MDS Containership Database” as of August 2015

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The shipping lines’ services currently calling at Ho Chi Minh Port are shown in the Table 3.5 and 3.6 below. Currently 73 liner services are available at Cai Mep Port.

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Table 3.5 Shipping Lines’ Services Calling at Ho Chi Minh Port (Part 1)

Yearl Ships Average Maximum Yearly Service Trade Lane Ship Operator Slot Charterer y Depl Ship Size Ship Size Capacity Name Calls oyed (TEU) (TEU) (TEU) Around SE Asia ‐the‐ /F East/ECNA CEC NYK/Hapag/OOCL 52 11 8,721 9,590 453,478 World /Red Sea SE Asia/F (Eastbo PEARL East/ECNA Rickmers 30 10 1,885 1,890 56,538 und) STRING /Europe/Med SE Asia Red Sea RSEAB Thoresen 26 1 1,316 1,316 34,216 /Red Sea Oceani SE Asia/Ocea APA Swire Shipping CNCO 52 3 2,001 2,080 104,035 a nia/F East SE Asia/F Ea IA5 MCC Transport Gold Star 52 8 1,115 1,147 57,961 st/Russia IA3/VTX4 MCC/SITC 52 4 2,769 2,824 143,988 IA9 MCC 52 4 1,678 1,740 87,256 CTS CNC Line/COSCO/YangMing CSCL/Evergreen 52 4 2,741 2,824 142,532 NCX CNC/TSL KLine 52 3 2,701 2,824 140,469 KPS CNC/HeungA 52 3 1,740 1,740 90,480 JTV CNC/TSL 52 3 1,626 1,740 84,552 RBC CNC/RCL COSCO/MOL/OOCL 52 3 1,340 1,498 69,697 HS3 MOL/Wan Hai 52 4 4,250 4,250 221,000 RBC4 MOL/RCL 52 3 2,686 2,959 139,689 CNC/Evergreen CBE MOL 52 3 2,043 2,730 106,253 /HeungA Hanjin/Hyundai JTV APL 52 3 2,468 2,468 128,336 /MOL NS1 APL 52 3 1,833 1,858 95,299 CKI Hyundai/KMTC/TSL Hanjin/YangMing 52 4 2,631 2,950 136,812 PHX2 NYK 52 3 2,723 2,840 141,579 PHX1 NYK 52 3 1,440 1,440 74,880 CSS OOCL 52 4 2,420 2,540 125,840 CVT OOCL/Wan Hai CNC/Samudera 52 4 1,451 1,740 75,465 JS4 KLine/NYK Hanjin/Hapag 52 4 4,570 4,830 237,640 CSE Hanjin/KLine/PIL 52 4 2,505 2,550 130,234 JABCO1 KLine Evergreen 52 3 1,700 1,700 88,400 CNC/Evergreen JABCO2 KLine/SITC 52 4 1,091 1,200 56,706 /Interasia/NYK NTS Hanjin/KMTC 52 3 1,692 1,800 88,001 JTC Yang Ming CNC 52 4 1,626 1,805 84,565 Intra‐ NHS Evergreen/Hanjin HeungA/Sinokor 52 4 2,514 2,553 130,728 SE Asia Asia THX Evergreen/OOCL /YangMing 52 3 1,910 2,300 99,320 /Far East NSC Evergreen 52 3 1,618 1,618 84,136 TWT Evergreen Cosco 52 2 1,164 1,164 60,528 CVT CSCL 52 5 2,500 2,500 130,000 CMX CSCL GoldenSea 52 4 1,103 1,200 57,343 PCI HeungA/Sinokor/SITC Evergreen/Yanghai 52 4 2,693 2,824 140,036 Hanjin/MOL BHS HeungA 52 3 1,115 1,284 57,963 /Namsung CNC/Hyundai/MCC ANX GoldStar/KMTC/Sinokor 52 4 2,644 2,950 137,462 /TSL/Winland Cosco/CSCL/Gema CVX GoldStar rtrans/HASCO 52 4 1,435 1,700 74,620 /Mariana/XPress VTX2 SITC 52 4 1,775 1,800 92,300 VTX1 SITC Cosco/Hasco 52 5 1,724 1,800 89,648 CKV SITC 52 5 1,058 1,100 55,037 JSV Wan Hai MOL 52 3 1,659 1,660 86,251 JCV Wan Hai KLine 52 3 1,632 1,660 84,847 CVM Wan Hai 52 3 1,597 1,710 83,027 KVS Wan Hai 52 4 1,229 1,368 63,921 KCV Wan Hai/YangMing CNC/Interasia 52 3 1,576 1,805 81,952 KTS KMTC Hyundai/Sinokor 52 3 1,585 1,585 82,420 VIET2 CKL/Namsung KMTC/CNC/Heung 52 3 1,867 1,900 97,067 VTS CKL/KMTC/Sinokor HeungA 52 3 1,666 1,900 86,615 NTX CKL/Namsung/Dongjin CNC 52 3 1,577 1,850 81,987 SVC AdvanceCont Evergreen 52 3 1,088 1,088 56,576 JTV2 TSL 52 3 1,069 1,118 55,605 SEAFN2 Gemadept 26 1 740 740 19,240 Source: MDS Transmodal “MDS Containership Database” as of August 2015

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Table 3.6 Shipping Lines’ Services Calling at Ho Chi Minh Port (Part 2)

Ships Average Maximum Yearly Service Yearly Trade Lane Ship Operator Slot Charterer Deplo Ship Size Ship Size Capacity Name Calls yed (TEU) (TEU) (TEU) SVN1 MCC 52 2 2,612 2,950 135,824 VIET CMACGM MCC/Puhai 52 1 1,740 1,740 90,480 VIET3 CMACGM Maersk 52 2 1,713 1,726 89,076 VIET1 Gemadept CMA‐CGM 52 1 830 830 43,160 MSS MOL/RCL 52 2 2,656 2,762 138,112 VMI Evergreen Hanjin/Maersk 52 2 1,699 1,700 88,348 VSM Evergreen Xpress 52 2 1,164 1,164 60,528 SE2 YangMing Evergreen 52 2 1,805 1,805 93,860 Intra‐ SE Asia SEA2 UASC 52 1 1,740 1,740 90,480 Asia Regional JKT/HCX Samudera APL/MCC/MOL 52 2 1,740 1,740 90,480 RHS RCL APL 52 1 1,550 1,550 80,600 JVS Advance Cont/COSCO PIL/KLine/MOL/UASC 52 2 1,470 1,510 76,440 VTS GoldStar/GoldenSea/OOCL ZIM/Puhai 52 3 1,430 1,700 74,360 VOSCO VOSCO 52 2 630 700 32,760 TVS Vinalines 26 1 1,118 1,118 29,068 VSS BienDong MOL 52 2 529 700 27,482 VSS2 BienDong 52 2 515 610 26,780 SaigonExp MSC MCC 52 1 1,932 1,932 100,464 Vietnam Coastal Coastal Vinalines 52 2 460 460 23,920 Coastal Coastal Bien Dong 26 1 200 200 5,200 Total 73 services 3,670 232 1,847 9,590 6,881,950 Source: MDS Transmodal “MDS Containership Database” as of August 2015

(2) Traffic of Transit Containers to/from Cambodia

1） Export Transit from Cambodia

Currently, the majority of export transit containers are moving by barge from Phnom Penh Port through Mekong River waterways, except for some containers by surface transportation in case of contingency. Sovereign Base Logistics started the regular barge service in 2009 with the support of MOL and the garment exporters in Phnom Penh, as the barge can accommodate 72-128 TEUs per voyage at far lower price than that for the truck.

2） Import Transit to Cambodia

Some import transit containers may be moving by truck across the border to SEZs in Bavet. Most of those containers are assumed to be the materials such as fabric and threads for garment manufacturing.

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3.2.1 Logistics Facilities in Thailand

(1) Laem Chabang Port

In Thailand, river in City were main ports until the 1980s. Laem Chabang Port was developed in Province, approximately 130km southeast of Bangkok, as a part of the Eastern Seaboard Development Project with support of Japanese ODA. Having been the largest port in the country since its commencement of operation in 1991, the port handled 6.8 million TEUs in 2015 and ranked 21st in the world in container throughput for the year. The port also has terminals for automobiles, which are now the major exports from Thailand. The port had a significant effect on the development of the manufacturing industries of the country, accelerating the relocation of manufacturing industries from the vicinity of Bangkok to eastern Bangkok, represented by the Amata Industrial Estate. It is undeniable that the relocation was promoted in consideration of the convenience of being close to the port.

Laem Chabang Port cannot be a hub port even with its handling volume. Thailand depends on transshipment in for its cargo bound for Europe. Therefore, major shipping companies calls at Port are not realistic. It is believed that Sihanoukville Port needs to be clearly positioned as a feeder port.

Laem Chabang Port is in the of Thailand, located approximately 130km southeast of Bangkok. The port is situated on the coastline of the Eastern Seaboard. Having been the largest port in the country since its commencement of operation in 1991, the port now ranks 20th in the world in container throughput for the year 2014.

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Source：Hutchison Port Holdings

Figure 3.1 Aerial View of Laem Chabang Port

Laem Chabang Port is administrated by the Port Authority of Thailand (PAT in short). PAT, a state enterprise under the control of Ministry of Transport, was established in 1951 as an administrator of Bangkok Port. Now PAT’s jurisdiction has expanded to Chiang Saen Port, Chiang Khong Port as the gateway ports of the Greater Mekong Sub-region, and Ranong Port as the gateway of Andaman Sea, in addition to Bangkok and Laem Chabang Port.

Layout of the berths currently in operation and for future expansion is depicted in Figure 3.2. The eleven berths surrounding the basin and four berths (C0, C1, C2, C3) surrounding basin are currently in operation. Basin I, was constructed as Phase I of the development plan, and commenced operation in 1991 with 14m depth and the capacity of 4 million TEUs per annum. Basin II was planned as Phase II with 16m depth, all civil works were done by Hutchison Port Holdings; the single concessionaire and delivered to the same company as the first case of the port, while three berths (D1, D2, D3) are yet to be in operation in spite of the original assumption of the concession contract to inaugurate the full berths within the year of 2011. With the full utilization of Basin II, the total capacity of the port will increase to 10.8 million TEUs per annum. The schedule of the development of Basin III has not been determined yet.

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(plan)

Source：PAT

Figure 3.2 Berth Layout of Laem Chabang Port

Foreign investors are entitled to form the concessionaire companies with majority shareholdings given to local companies registered in Thailand. Table 5.7 indicates the details of the facilities and the concessionaires with the names of the foreign shareholders.

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Table 3.7 Facilities and Concessionaires of Laem Chabang Port

Terminal Facilities Concessionaires Nos of Berth Length Depth Foreign Investors Contra ct Valid Type Quay Name of Company No. (m) (m) Participation Effected Years Cra nes A0 Multi Purpose 590 10 － LCMT Co., Ltd. APM Terminals 2004 30 A1 Cruise, RoRo 365 14 － Laem Chabang Cruises Center Co., Ltd. NYK 2000 30 A2 Containers 400 14 Thai Laem Chabang Terminal Co., Ltd. Hutchison Port Holdings 1996 30 8 A3 Containers 350 14 Hutchison Laem Chabang Terminal Co., Ltd. Hutchison Port Holdings 2004 30 A4 Conventional 250 14 － Aawthai Warehouse Co., Ltd. 1996 25 A5 RoRo 450 14 － Namyong Terminal Co., Ltd. 1996 25 Basin I B1 Containers 300 14 8 LCB Container Terminal 1 Co., Ltd. APM Terminals, PSA 1995 27 B2 Containers 300 14 4 Evergreen Container Terminal (Thailand) Co., ltd. Evergreen 1993 27 B3 Containers 300 14 4 Eastern Sea Laem Chabang Terminal Co., ltd. Marubeni, Kamigumi, PSA 1995 27 B4 Containers 300 14 5 TIPS Co., ltd. MOL, NYK 1995 27 B5 Containers 400 14 4 Laem Chabang International Terminal Co., ltd. DP World, NOL 1996 30 C0 RoRo 500 16 － Laem Chabang International Ro‐RoTerminal Co., ltd. NYK 2005 n/a C1 Containers 700 16 Hutchison Laem Chabang Terminal Co., Ltd. Hutchison Port Holdings 2004 30 12 C2 Containers 500 16 Hutchison Laem Chabang Terminal Co., Ltd. Hutchison Port Holdings 2004 30 C3 Containers 500 16 4 Laem Chabang International Terminal Co., ltd. Hutchison Port Holdings 2003 30 Basin II D1 Containers 500 16 － Hutchison Laem Chabang Terminal Co., Ltd. Hutchison Port Holdings 2004 30 D2 Containers 500 16 － Hutchison Laem Chabang Terminal Co., Ltd. Hutchison Port Holdings 2004 30 D3 Containers 500 16 － Hutchison Laem Chabang Terminal Co., Ltd. Hutchison Port Holdings 2004 30 Source：PAT

Terminal-wise container throughput is shown in Table 3.8 for the year 2015, and in Table 3.9 for the historical years from 2010.

Table 3.8 Container Throughput of Laem Chabang Port by Berth（2015）

('000 TEUs) Inbound Outbound Total Laden Empty Sub Total Laden Empty Sub Total Laden Empty Total A01671653313428350508172681 A2 85 28 113 145 3 148 229 31 260 A3 21 11 32 42 0 43 63 12 75 B11621933553346340496200695 B2 73 203 276 334 2 336 406 205 611 B31481162642634267411120531 B42461083534176423662114776 B5 208 128 336 324 10 334 532 138 670 C1‐C2 530 414 943 899 13 912 1,429 426 1,855 C3 240 114 354 299 15 314 539 129 668 Total 1,877 1,480 3,357 3,398 67 3,465 5,274 1,547 6,821 Source：Bangkok Ship owners and Agents Association

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Table 3.9 Historical Container Throughput of Laem Chabang Port by Berth

('000 TEUs) 2010 2011 2012 2013 2014 2015 A0 343 443 346 493 630 681 A2 242 311 315 297 356 260 A3 107 27 37 61 60 75 B1 814 717 780 644 684 695 B2 474 461 543 548 609 611 B3 628 626 589 489 542 531 B4 650 744 873 842 924 776 B5 546 646 612 597 580 670 C1‐C2 863 1,120 1,183 1,505 1,559 1,855 C3 523 633 650 565 639 668 Total 5,190 5,731 5,926 6,041 6,583 6,821 Source：Bangkok Ship owners and Agents Association

(2) Lat Lrabang ICD

A characteristic of Thailand that is not seen in other ASEAN countries is their railway ICD (Latkrabang ICD). Containers can be transported by rail from Laem Chabang to Latkrabang, and the current share is approximately 40%. Twenty-four trains shuttle the route every day based on a time schedule. In other ASEAN countries, trains carry cargo together with passengers, and freight trains do not depart until they are filled with cargo, resulting in irregular transport. In this respect, the scheduled operation of special container trains in Latkrabang is noteworthy.

The Latkrabang district has and a truck yard located next to the Latkrabang ICD, allowing the transport modal shift.

Lat Krabang ICD, belonging to Lat Krabang District, Bangkok Metropolis, located 30km from Bangkok Port and 110km from Laem Chabang Port, is functioning as a dry port supplementing Laem Chabang Port. The State Railway Authority of Thailand (SRT) under the master plan of the Eastern Seaboard Development Program developed the ICD.

The ICD is a bonded area where shipping lines register as an inland CY to receive/deliver FCL cargoes. Main shippers/consignees using this ICD are the manufactures located in the industrial estates in the northern suburbs of Bangkok

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Source：ESCO

Figure 3.3 Location of Lat Krabang ICD and Laem Chabang Port

The ICD has a rail siding branching from the SRT’s Bangkok-Chachoensao mainline, as well as an access to the main expressways linking Laem Chabang Port with Bangkok Metropolitan Area and the northern industrial areas. Suvarnabhumi Bangkok Airport is also in close proximity.

The ICD has an area of 2.6 km2, which is divided into six modules, leased out to six different private operators. As the concession contracts with the six operators have already expired, SRT intends to integrate the operations of the ICD into a single company’s operation (called “Single Rail Transfer Operator”, or “SRTO”) to improve the operational capacity from the current 1.4 million TEUs to 2 million TEUs per annum.

The rail siding penetrates the center of the area so that each module can easily access the container wagons for lift on/off.

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Source：Google Inc. modified by the Study Team

Figure 3.4 Module Layout of Lat Krabang ICD

Source：Study Team

Figure 3.5 Module Container Yard in Lat Krabang ICD

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The container throughput of Lat Krabang ICD for the year 2015 is shown by module in Table 3.10 and by transport mode in Table 3.11. The ICD handled 1,425,000 TEUs in 2015, which amounted to approximately 21% of the total throughput of Laem Chabang Port. Out of 1,425,000 TEUs transported to/from Laem Chabang Port, 446,000 TEUs (31%) were carried by railway.

Table 3.10 Container Throughput of Lat Krabang ICD by Module（2015）

('000 TEUs) Module/Operator Import Export Total Module A Siam Shore Side 141 177 318 Module B ESCO 134 137 271 Module C Evergreen Container Terminal 134 191 325 Module D TIFFA ICD 67 67 134 Module E Thai Hanjin Logistics 51 57 109 Module F NYK Distribution Service 112 158 270 Total 639 786 1,425 Source：Bangkok Ship owners and Agents Association

Table 3.11 Container Throughput of Lat Krabang ICD by Transportation Mode（2015）

('000 TEUs) By Truck By Rail By Truck Total (other Imports 184 424 31 639 Exports 262 498 26 786 Total 446 922 57 1,425 Share 31.3% 64.7% 4.0% 100.0% Source：Bangkok Ship owners and Agents Association

Daily 24 rail trips (twelve trips each for outbound/inbound) with 30 wagons (60 TEUs) for each trip are available by the operation of SRT. The transit time by railway from ICD to Laem Chabang Port is three hours ten minutes, and two hours by truck. The prevailing transportation cost by rail is approximately Baht 2,000/20’ and Baht 3,100/40’, while the cost by truck is Baht 3,100/20’ or 40’.

The transportation of containers between Lat Krabang ICD and Laem Chabang Port is performed by shipping lines at their own cost and responsibility, since Lat Krabang ICD is registered by shipping lines as the place of receipt/delivery. For example, the shippers in a remote place such as Ayutthaya or a northern industrial area can just bring their export containers to Lat Krabang ICD, then the shipping

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lines will take care of those containers up to the loading at Laem Chabang Port.

(3) Bangkok port

1） Facilities

Bangkok Port consists of public/private wharves scattered along both sides of Chao Phraya River. As the access channel has the depth of only -8.5m from Mean Sea Level and width of 100m in the straight section and 250m in the bend section, the permissible dimension of the ships is limited to 8.2m draft, 172m LOA and 12,000 DWT. After Laem Chabang Porft started operation in 1991, the Bangkok Port has been reducing its share in the cargo handling volume in Thailand, as the Thai government has been setting the limitation on the handling volume of Bangkok Port to alleviate the traffic congestion of the Bangkok Metropolitan Area. Consequently role sharing has been fixed between Laem Chabang Port for large-scale mainline ships and Bangkok port for small-scale Intra-Asia ships.

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Source：Guide to Port Entry (left), PAT (right)

Figure 3.6 Layout of the Wharves (left) and Access Channel (right) of Bangkok Port

The wharves of Bangkok Port are categorized by the administrative form into PAT Terminal, Authorized Private Wharves and Private Wharves.

2） Klong Toey Port (PAT Terminas)

Klong Toey Port consists of 84 berths on the left bank of Chao Phraya River, located 28km up from the river mouth. The construction of the port started in 1938 based on ’s development plan. After the interval during World War II, the port was further developed in increasing depth of the access channel and purchase of modern cargo handling equipment. Since opening in 1951, the port had been playing the role of the largest port in Thailand and a gateway port of the Bangkok Metropolitan Area until 1997 when Laem Chabang Port exceeded it in cargo handling volume.

Klong Toey Port is composed of the West Quay with 1,660m length and the East Quay with 1,528m length. The East Quay is a container terminal equipped with

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Final Report fourteen quay gantry cranes and 36 RTGs. The West Quay is a conventional terminal without a quay gantry crane, operated by ship gears and mobile cranes. The conventional cargoes are also loaded/discharged to/from barges.

Source: Bangkok Shipowners and Agents Association.

Figure 3.7 Layout of Berths in Klong Toey Port

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Table 3.12 Facilities and Cargo Handling Equipment of Klong Toey Port

Berthing Limitation Number of Berth/Dolphin/Buoy Length (m) LO A Draft Berths Capacity (m) (m) 172 8.2 7 East Quay 1,528 8 91 4.6 1 West Quay 1,660 10 172 8.2 10 Klongtoey Dolphins 1,400 36 172 8.2 7 Bang Hua Sua Dolphins 1,600 25 172 8.2 8 Mooring Buoys at 137 7.6 4 1,579 5 Sathupradit 91 7.0 1

Storage Area Square Metres Inside Customs Fence Transit Sheds 1 - 17 61,230 Supplementary Transit Shed 15,700 Overtime Cargo Warehouse 9,820 Bonded Warehouse 2,100 Import Motor Cars Unit 13,050 Open Yard for Stuffing 106,920 General Cargo Storage Area 120,890 Container Terminal 1 98,600 Container Terminal 2 49,000 Total 477,310 Outside the Customs Fence In-Transit Warehouse and Open Storage Area 16,360 Other Storage Area 26,652 Total 43,012 Total Storage Area 520,322 Quantity Equi pme nt Capicity (Units) Rail Mounted Shoreside 32.5 - 40 tons 14 Container Cranes Yard Gantry Cranes 30 - 40 tons 36 Top Loaders 40 tons 33 Empty Container Stackers 7.5 tons 25 10 tons 3 Mobile Cranes 50 tons 7 Tractor for Trailers 30 - 40 tons 154 Container Chassis 30 - 40 tons 151 Towing Tractors 12,000 lbs 14 Trailers 10 tons 14 Multi Purpose Trailers 5 - 7 tons 11 Forklift TrucksVarious Size 223 Motor Trucks 5 - 7 tons 46 Source：PAT

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3） Private Wharves

Along Chao Phraya River, there are 41 private wharves on the left bank and 37 on the right bank. Those permissible drafts are in the range from 2m to 10m. a. Authorized Private Wharf

Authorized Private Wharves are granted license by the Thai Customs for the purpose to mitigate the congestion of Klong Toey Port and its immediate hinterland. The following four container terminals, all located downstream of Klong Toey Port, are currently in operation.

 Bangkok Modern Terminal（BMT）  Thai Prosperity Terminal（TPT）  Unithai Terminal（UTT）  Sahathai Terminal

Main specifications are as follows:

Table 3.13 Facilities of Authorized Private Wharves

Terminal Berth Depth Area Cargo Handling Equipment length BMT 315m 8.5m Ground slots 3 x 120t mobile cranes, 3,000 TEU 8 reach stackers, 4 top loaders TPT 275m 8.5m 80,000 m2 2 x 100t & 1 x 300t mobile cranes, 1 x 35t RMG, 8 reach stackers, 4 top loaders UTT 202m 8.5m 60,000 m2 3 x 35t quay gantry cranes, （Ground slots 6 x 35t RTGs, 3,600 TEU） Sahathai 360m 8.0m 168,000 m2 2 x 40t quay gantry cranes, (low tide) 1 x 280t & 1 x 250t mobile cranes 2 RTGs, 8 reach stackers Source：Web sites of the terminal operators b. Authorized Private Wharf

Those wharves are scattered along the Chao Phraya River, handling mainly domestic cargoes such as rice, maize, fertilizer, steel products, chemicals, petroleum products etc., and foreign cargoes also sometimes subject to the customs permission.

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4） Cargo Handling Volumes

At Laem Chabang Port, the handling capacity of the container terminals currently in operation is reaching its limit. Consequently Bangkok Port has been increasing its handling volume. In 2015, the throughput of Bangkok Port marked 1.92 million TEUs in total of PAT Terminals and the Authorized Private Wharves.

PAT Terminals, handling 80% of the total volume of Bangkok Port, have been dealing with the recent increase of cargo volume by improving the berth layout and installing additional RTGs. Preparing for further increase of cargo volume in future, PAT has a plan to divert the West Quay from a conventional terminal to a container terminal.

Table 3.14 Historical Container Throughput of Bangkok Port

('000 TEUs) 2012 2013 2014 2015 PAT Terminal Inbound 825 863 855 895 Outbound 573 642 681 643 S. Total 1,397 1,505 1,536 1,538 Authorized Private Wharves BMT Inbound36384338 Outbound 21 18 19 17 S. Total 57 55 62 55 TPT Inbound72535749 Outbound 78 52 55 38 S. Total 150 105 112 87 Unithai Inbound57626865 Outbound 54 49 56 58 S. Total 110 111 124 123 Sahathai Inbound23414450 Outbound 35 53 57 69 S. Total 58 95 101 119 Authorized Inbound 188 193 211 203 Private Wharves Outbound 188 172 188 181 Total S. Total 375 366 399 384 Bangkok Port Inbound 1,012 1,056 1,066 1,098 Total Outbound 760 815 869 824 Total 1,773 1,871 1,935 1,922 Source: Bangkok Shipowners and Agents Association.

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In July 2015, MOL started a barge shuttle service between SahaThai Terminal, Thai Prosperity Terminal on the Chaophraya River and Laem Chabang Port. Having registered SahaThai and TPT as CYs, MOL is carrying containers from those CYs to Laem Chabang Port at their responsibility and cost. It takes eight hours by 70 TEU self-propelled barges. MOL offers the cut-off of the CYs at the same time as Laem Chabang (24 hours before ship arrival at Laem Chabang), as the barges can be docked at Laem Chabang just next to the mainline ship and quick transshipment is ensured. The demand for barge shuttles is expected to increase, as it is environmental friendly and makes it possible to avoid the traffic jams in Bangkok Metropolis and the truck bans (to prohibit 6-wheel or larger vehicles traffic on the ordinary roads and expressways at 06:00～09:00, 16:00～20:00 except Saturday, Sunday and Holidays) as well.

(5) Logistics facilities

With a boom in the Thai manufacturing sector, logistics facilities have been actively developed, while private enterprises are promoting investment in warehouse facilities and improving logistics services as a matter of course. Over twenty years have passed since Japanese automobile manufacturers began business operations in Thailand. The country is now known as “the Detroit of ,” and offers just-in-time delivery on a routine basis as required by the .

As a result, standards have spread in Thailand, such as the “milk run pickup system” in which each vehicle runs a predetermined route at predetermined time to collect cargo and increase the loading efficiency, as well as GPS-based time management conducted by automobile logistics companies. Unlike , Thailand has no special complex for the logistics industry, but logistics companies have facilities in and around the industrial complexes.

3.2.2 Logistics Facilities in Vietnam

(1) Ports

On the Indochina Peninsula, only Vietnam has a port on the Pacific. In Ho Chi Minh,

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which has a close relationship with Cambodia, river ports along the Mekong used to be main ports. Currently, Cat lai Port serves as the main port and its annual handling volume has reached 200 million TEUs. However, large vessels have difficulty calling at the port because it is a river port. There is no room for expansion; it is difficult to expand the port facilities because of the urbanization of the surrounding areas. For this reason, Vietnam has developed and started to use a deep port at sea-facing Cai Mep Thi Vai. This port enabled Cambodia to have a direct route to the US and East Asia, and there are great expectations for the port. The port has a geographical advantage for US ship calls. This is in contrast to Laem Chabang Port, which has difficulty opening a North American route despite the large cargo volume.

Transport cost is higher by approximately 100 dollars because of a longer transport distance than conventional ports around Ho Chi Minh. The development of a two-lane access road, national highway 51, is also being promoted.

This resulted in expectations for better services at ports in southern Vietnam than at Sihanoukville Port.

Meanwhile, however, Vietnam does not permit Cambodian vehicles to enter Cat lai Port. Therefore, cargo on Cambodian vehicles needs to be moved onto Vietnamese vehicles for export from Cat lai Port although Cambodian vehicles are allowed to drive in Vietnam. (There appears to be no problem regarding Cai Mep Port.)

1） Cai Mep Port a. Facilities outline

Cai Mep Port is the name commonly used to refer to a group of terminals located on the left bank of Cai Mep-Thi Vai River. The terminals handling containers, break bulk and liquid bulk in the Cai Mep area and other small-scale domestic terminals scattered nearby are collectively and officially called Vung Tau Port. The container terminals currently in operation are Tan Cang-Cai Mep International Terminal (TCIT), Tan Cang-Cai Mep Container Terminal (TCCT), Cai Mep International Terminal (CMIT) and Tan Cang-Cai Mep Thi Vai Terminal (TCOT). TCIT and TCCT were operationally integrated into one terminal by TCIT in 2014. TCOT was developed by Japanese ODA. The locations of those three active container terminals

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Source：Tan Cang-Cai Mep International Terminal Co. Ltd.

Figure 3.8 Locations of 3 Container Terminals Currently in Operation in Cai Mep Port

Though there used to be three other container terminals i.e. SSIT, SP-PSA and SITV, those three have already been converted to conventional terminals due to the oversupply of container terminals in the Cai Mep area. The operator, joint venture partners and container throughput of each terminal are shown in Table 3.15 and 3.16 respectively.

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Table 3.15 Operators and Investors of the Container Terminals in Cai Mep Port

Berth Berth Nos of Operator Terminal Name Length Depth Quay Status (J/V partners) (m) (m) Cranes Tan Cang Cai Mep Joint Stock Co. Started operation in Jun. 2009 TCCT 300 14 3 (Saigon Newport, Vietnamese investors) Operated by TCIT since Apr. 2014 Tan Cang‐Cai Mep International Terminal Co., Ltd. TCIT 590 14 6 Started operation in Jan. 2011 (SNP, MOL, Hanjin, Wan Hai) Cai Mep International Terminal Co., Ltd. CMIT 600 14 5 Started operation in Dec. 2011 (Vinalines, Saigon Port, APM Terminals) TCOT Tan Cang‐Cai Mep Thi Vai Terminal Co., Ltd Started operation in Jan. 2013 600 14 4 (ODA Terminal) (co‐funded by Vietnamese government and Japanese ODA) Operated by SNP since Jan. 2014 SP‐SSA International Container Service J/V Co. Started operation in 2012 SSIT (SP‐SSA) 600 14 4 (Saigon Port, SSA Marine) Currently used as a conventional terminal SP‐PSA International Port Co., Ltd. Started operation in Jul. 2009 SP‐PSA 600 12 4 (Saigon Port, PSA) Currently used as a conventional terminal Saigon International Terminals Vietnam Started operation in Jan. 2010 SITV 730 12 6 (Saigon Investment Construction, HPH) Currently used as a conventional terminal

Source：Study Team

b. Throughput

Table 3.16 Container Throughput of Cai Mep Port by Terminal (2014)

Terminal TEUs TCIT 922,885 CMIT 402,714 TCOT 15,350 TCCT 823 SP‐PSA 3,169 SITV (HPH) ‐ SSIT (SSA) ‐ Others (domestic) 334,581 Total 1,344,941 Source ： Vietnam Seaports Association, TCIT

c. Transship Operations from Barges to Mainline Containerships

The barges coming from Phnom Penh are docked at the ordinary berth of each container terminal where mainline containerships are docked. At TCIT, a dedicated berth may be allocated for barges in addition to the ordinary berths. Containers discharged from the barge stay for one or two days until loading onto the mainline ships. Mid-stream operation is prohibited in Cai Mep by the customs.

At TCIT, the number of barges coming from Ho Chi Minh ICDs is increasing so rapidly that it is causing a substantial burden on the availability of berthing windows. Therefore, TCIT has introduced an incentive for the trucks to encourage

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surface transportation from Ho Chi Minh City.

Source：Study Team

Figure 3.9 Discharging from a Barge at the Dedicated Berth of TCIT

2） Ho Chi Minh Port a. Facilities outline

Ho Chi Minh Port is not the name of a port but the collective term of the ports and terminals scattered along the Saigon River. There are six major container terminals currently in operation. The locations, operators and throughput of the six terminals are shown in Figure 3.10, Table 3.17 and Table 3.18 respectively.

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ICDs

Cat Lai Terminal Saigon Port VICT Ben Nghe Port Lotus

SPCT

Cai Mep Port

Source：Study Team

Figure 3.10 Locations of Major Container Terminals in Ho Chi Minh

Table 3.17 Operators and Foreign Investors of the Container Terminals in Ho Chi Minh Port

Nos of Length Depth Terminal Name Quay Operator (J/V partners) (m) (m) Cra nes Tan Cang‐Cat Lai Terminal 1,500 12 20 Saigon Newport Company VICT 678 11 7 First Logistics Development (JV) Co. (Mitsui & Co., NOL) Saigon Port 1,750 10 2 Saigon Port Co., ltd. SPCT 500 14 5 Saigon Premier Container Terminal (DP World) Ben Ngue Port 816 13 5 Ben Ngue Port Limited Lotus Port 275 12 3 Lotus Joint Venture Co. (BASCO, Ukraine) Source：Vietnam Seaports Association, TCIT

b. Throughput

Out of the total throughput of 5.3 million TEUs, Cat Lai has the largest of 3.8 million, of which the share amounts to 72%.

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Table 3.18 Container Throughput of Ho Chi Minh Port by Terminal (2014)

Terminal TEUs Cat Lai Terminal 3,827,115 VICT 583,693 Saigon Port 345,147 SPCT 301,382 Ben Nghe Port 148,306 Lotus Port 84,900 Total 5,290,543 Source ： Vietnam Seaports Association, TCIT

(2) ICDs in Ho Chi Minh

In the Ho Chi Minh district in Vietnam, ICD means a container base located along a river. As is the case with Cambodia, cargo trucks are prohibited from traveling in Ho Chi Minh during the daytime, and it is difficult to depend on road transportation for cargo carry-in/carry-out at river ports. For this reason, cargo used to be carried to an ICD along a river and carried by barge to the port from which the cargo is shipped.

Thus, many local logistics facilities are located along a river. Shipping companies used these ICDs as container yards (CY), set their cut-off time a half day to one day earlier, and offered “barge” transport and shipment services.

Shipping companies, which engage in local feeder transport, are still using these ports, and transport services to and from Cai Mep Port are also available.

1） Locations and Facilities of the ICDs

In Ho Chi Minh, ICDs are playing an important role for the transportation of seaborne containers. Clusters of ICDs operated by five companies are located in Thu Duc District, on the left bank of Saigon River approximately 20km upstream of Cat Lai Port. Also located just beside NH 1, the ICDs have good access to both the waterways and roads. The five ICD operators are Transimex, Phuc Long (PLC), Phuoc Long (PIP), Sotrans and Tanamexco. Locations and photos of the ICDs are shown in Figure 3.11 and 3.12 below.

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Source：Study Team, Googles Inc.

Figure 3.11 Location and Layout of ICDs

Stacking at the Container Yard Loading onto Barge

Source：Study Team, Transimex

Figure 3.12 Operations at ICD Transimex

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Out of the five operators above, the Study Team visited Transimex and Phuc Long. Throughput and facilities of each ICD are shown in Table 3.19 below. When assuming 0.4 million TEUs p.a. handled at each ICD, the total of the five ICDs would amount to 2 million TEUs, which is approximately 38% of Ho Chi Minh Port’s annual throughput of 5.29 million TEUs.

Table 3.19 Throughput and Facilities of 2 Major ICDs

Transimex Phuc Long VICT 150,000 0 Container Cat Lai 50,000 10,000 Laden Throughput Cai Mep 100,000 210,000 (in TEUs, Sub Total 300,000 220,000 2015) Empty 100,000 180,000 Total 400,000 400,000 Total Area (m2) 93,970 80,000 Facilities Berth Length (m) 180 84 Quay Cranes (units) 43 Equipment RTGs (units) 22 Reach Stackers (units) 98

Source：Study Team

2） Operations of the ICDs

Major shipping lines have registered the ICDs as their inland CYs to receive/deliver FCL cargoes. Main shippers/consignees using those ICD are the manufactures located in the industrial estates around Ho Chi Minh City. a. Cut off time and dwell time

The cut-off times for the export containers are set by the shipping lines at:

･ 12 hours before the cut-off of Cat Lai or VICT

･ 16 hours before the cut-off of the terminals in Cai Mep

In the case of Transimex, containers are dwelling approximatelyone or two days for exports and six days for imports on average. b. Customs procedures

Though the ICDs are all granted bonded status by customs, some ICDs don’t accept import containers as they may stay long due to the import customs clearance.

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Containers are scanned by the customs on a spot basis by use of a scanning machine installed at Phuoc Long for sharing among the five ICDs.

c. Transportation of containers to the container terminals

After receiving at the ICD, the operator of the ICD arranges the transportation of export containers down to the terminals in Ho Chi Minh or Cai Mep by order/at the cost of the shipping line. In the case of a barge, it takes three hours to Cat Lai or VICT, and ten hours to Cai Mep. Some of the barges deployed for the ICD/Cat Lai shuttle are operated by Saigon New Port; the operator of Cat Lai terminal.

d. Tariff rates

The uniform tariff rates are applied by each ICD operator as follows, which seem quite reasonable:

･ Lift-off for export container (paid by the exporter) : USD 16/20’, USD 22/40’

･ Barge freight for Cai Mep(paid by the shipping line, including lift-on to the barge): USD 30/20’, USD 60/40’

e. Utilization of EDI by ICD operators

･ With shipping lines

Each ICD exchanges container data with shipping lines by use of EDI (in CODECO format), which is supported by the TOS of each terminal.

･ With the customs

The manifest data are sent to the customs by EDI through the “e-Manifest” system.

･ With the container terminals and other government agencies

EDI is not used; emails with Excel attachments are used instead.

(3) Logistics facilities

In 2004, Vietnam specified a schedule for foreign investment in logistics facilities as a requirement to join the WTO in 2014. In that schedule, logistics services were defined in Decree140/2007/ND-CP (2007, Sep),” and the opening schedule was prescribed for each service. However, foreign investment is supposed to consider the supply-demand relationship. In particular, container vanning/devanning facilities

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need to have a majority of foreign investors. Container transshipment facilities for sea transport (inland CFS) are found relatively easily in Ho Chi Minh, but there appears to be a limited number of land transport facilities. This is probably one of the reasons why Japanese companies cannot promote consolidated cargo transport with Cambodia.

3.3 Logistics in Malaysia

3.3.1 Logistics and Trade Facilitation Master Plan (2015-2020) in Malaysia

The Logistics and Trade Facilitation Master Plan released in March 2015 provides the strategic framework to resolve bottlenecks in the logistics sector. This plan will ensure Malaysia’s status as a key regional player in the medium term. The logistics sector is important as it supports all sectors of the economy, facilitates trade, reduces the cost of doing business and contributes to enhancing productivity and the economy.

The Master Plan sets out five strategic shifts and 21 action items. The Master Plan will be implemented in three phases. During the first phase beginning in 2015, the focus will be on addressing bottlenecks in the sector. In the second phase, initiatives will be introduced to promote the domestic growth of the sector and in the third phase, the emphasis will be on creating a regional footprint. It is an ambitious plan but is doable with the commitment of all stakeholders. To ensure the plan is effectively implemented, initiatives proposed in the Master Plan will be part of the Eleventh Malaysia Plan, 2016-2020.

The successful implementation of this Master Plan will increase the contribution of the transport and storage sub-sector to the gross domestic product from 3.6% in 2013 to 4.3% in 2020, an estimated increase of RM22.2 billion. The cargo volume is projected to grow 8% annually to reach 880 million tons in 2020. It will also generate 146,000 new jobs by 2020, mostly in the high skilled category.

To ensure that the Master Plan is implemented expeditiously and in a cost effective manner, the National Logistics Taskforce will be established and headed by the Minister of Transport. The Taskforce will report regularly to the Special Committee on Services Sector chaired by the Prime Minister.

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Five strategic shifts and 21 action items will be implemented to improve overall productivity and to better connect industries with their markets, both locally and internationally. The strategic shifts are as follows:

(1) Strategic Shift 1: Strengthening the institutional and regulatory framework

Strengthen the institutional structure and simplify or streamline the regulations to reduce inefficiency and duplication.

(2) Strategic Shift 2: Enhancing trade facilitation mechanisms

Increase the efficiency of trade facilitation mechanisms particularly through improvements in the cargo clearance system, paperless trading and security of trade documents. This will boost trading activities and reduce the cost of doing business.

(3) Strategic Shift 3: Developing infrastructure and freight demand

Consolidate cargo volume through a well-defined ‘hub and spoke’ system, provide better connectivity to entry points, optimizing usage of existing infrastructure and promote modal shift from road to rail.

(4) Strategic Shift 4: Strengthening technology & human capital

Enhance the adoption of technology to reduce exchange of manual documentation and optimize transport movements. This strategic shift also emphasizes the enhancement of human resource capabilities by attracting, nurturing, and retaining skilled talent within the logistics industry.

(5) Strategic Shift 5: Internationalizing logistics services

Enhance capabilities of logistics service providers by strengthening internal capabilities and external readiness to enable them to compete at a global level.

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Source: MOT in Malaysia

Figure 3.13 Organization for Logistics and Trade Facilitation Master Plan

3.3.2 Ports in Malaysia

Port Klang is the main gateway by sea into Malaysia. Known during colonial times as Port Swettenham but renamed Port Klang in July 1972, it is the largest port in the country. It is located about six kilometers southwest of the town of Klang, and 38 kilometers southwest of Kuala Lumpur. Port Klang has since grown and now establishes trade connections with over 120 countries and dealings with more than 500 ports around the world.

Westport is managed by Westports Malaysia Sdn Bhd (formerly known as Kelang Multi Terminal Sdn Bhd). A passenger port, Port Klang Cruise Centre, opened in December 1995 at Pulau Indah which is located next to the cargo terminals of Westport. Cruise line and naval ships drop anchor in any of the three berths at Port Klang Cruise Centre, which was under the management of Star Cruises before being taken over by the Glenn Marine Group.

Table 3.20 Container Cargo Throughput in 2014

Million TEUs Remarks

Kelang Westport 8.4

Kelang Northport 2.5 transshipment=70%

Tanjung Pelepas 9.0 transshipment=100%

Source: MOT Malaysia

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Northport is owned and operated by Northport (Malaysia) Bhd and comprises dedicated multipurpose port facilities and services. The Northport entity was a merger of two companies; Kelang Container Terminal (KCT) and Kelang Port Management (KPM). Its operations also cover South Port, which was renamed South point for conventional cargo handling, and acquired Northport District park Sdn Bhd (NDSB) as part of its logistics division.

Source: Klang Port.

Figure 3.14 Port Klang

The Port of Tanjung Pelepas is a container port located in Johor Bahru District, Johor, Malaysia, and is part of the APM Terminals Global Terminal Network, which holds a minority share in the joint venture.

There are sixteen container berths (15‐17.5 m depth); the total length of berths is 4,600 meters while terminal capacity is 11 million TEU per year. The container yard of 163.6 ha consists of CT 1 - 16.2 ha, CT 2 - 24.3 ha, CT 3 - 24.3 ha, CT 4 - 24.3 ha, CT 5 - 24.3 ha, CT 6 - 24.3 ha and CT 7 - 25.9 ha.

On 17 March 1986, the container terminal facilities that were operated by Port Klang Authority were privatized as part of the privatization policy of the government.

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In January 1988, construction work began on a new 800 feet (240 m) berth, as an alternative to the immediate development of West Port. A government directive in 1993 selected Port Klang to be developed as the National Load Centre.

Source: JICA Study Team.

Figure 3.15 Container Yard of Westport (Study Team）

West ports are a truly Malaysian Port with 4,500 workforces in the company all being Malaysian, and many are from the island where West ports Malaysia is situated, Pulau Indah. The hardcore poor and poverty in the island have been reduced drastically.

Table 3.21 LOLO Charge of Westport（Klang Port）

Ft LOLO（RM） Remark

Import/Export 20 260 $70

40 400 $120

Transship 20 160

40 200

Source: Klang Port.

Northport is one of the largest multi-purpose ports of its kind in the national ports system offering dedicated facilities and services to handle a wide variety of cargoes ranging from containers to cars, break bulk cargoes as well as the capacity to handle

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liquid and dry bulk cargoes of all types and shipment sizes. Its facilities are located at two locations - in South point for conventional cargo handling and in Northport where the state-of-the-art container handling facilities are located. Northport logistics further adds value to the business entity. Relations between two ports is corporative rival.

3.3.3 International Rail Transit between Malaysia and Thailand

As ASEAN continues to grow as a huge market, various economic activities towards the realization of the Economic Community have been carried out. In Thailand, the automotive industry with its supply chain is being developed and the cargo volume is expected to be increased in the region.

On the other hand, a lack of truck drivers, vehicle shortages, and traffic congestion has become serious issues. The enhancement of transport capacity together with environmental considerations is urgently required. Under such a background, Nippon Express commenced an international railway transit service in December 2013 between Bangkok (Thailand) and Kuala Lumpur (Malaysia), which transports the largest cargo volume in the ASEAN region. Known as "SS7000," this is the first such service provided by a Japanese company in the region.

This service is provided between Bang Sue Station in Bangkok and Sungai Way station in Kuala Lumpur. Padanbesaru station is used for border crossings. Double track construction has been carried out on the Malaysia side up to Ipoh. A container train is composed of a locomotive and wagons; the locomotive is changed at Padanbesaru station situated on the border. In other words, each country employs its own locomotive while Malaysian wagons are used in all sections. Currently, 27 40ft container boxes can be loaded in one train. In addition, a container box can be leased from Nippon Express at the request of a shipper.

Import and export customs clearance is carried out on the Malaysian side of the border at Padanbesaru station rather than in Bangkok and Kuala Lumpur. In Padanbesaru, a truck transport service is available at the request of shippers or in the event of a natural disaster etc. A state-owned container National Corporation (KONTENA NASIONAL) on the Malaysian side in the Sungai Way Station is in charge of the loading and unloading work. The transport lead-time is reduced, and

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It takes 60 hours to transport containers between the two stations including the import and exports customs clearance at the border, and takes 72 hours (three days) to reach a delivery destination. Truck transport has the same lead-time but is more expensive. In addition, railway transport is faster than maritime transport, which takes twelve days.

Regarding transport quality, the vibration of rail transport is smaller than that of truck transport. In trucking, the maximum vertical vibration has been measured as 10G, but it is below 5G in the case of railway transport. In addition, packaging costs are lower than in the case of truck and maritime transport and no major damage to the external packages have been reported.

Source: MOT.

Figure 3.16 Railway network in Malaysia

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Source: Nippon Express.

Figure 3.17 Container train between Malaysia and Thailand

3.3.4 The Port Klang Community System (PKCS)

The Port Klang Community System (PKCS) is an e-Commerce messaging system that was first launched in 1993. The key participants in this system are the port authority, customs, port operators, shipping agents, forwarding agents, freight forwarders, banks and technology providers. The primary objective of the system was to streamline the documentation procedures, eliminate duplication and redundancies and, where possible, to capture information at the source and propagate it across the supply chain to all parties concerned. PKCS started out supporting only the port’s shipping and forwarding agent communities. PKCS is today part of the Dagang Net network and serves an extensive chain of trading parties that overlap into the logistics/transportation, importers and exporters, customs and government agencies in Port Klang, KLIA and Johor, numbering about 2,500 in total.

Today the PKCS facilitates the exchange of a wide range of electronic cargo documents covering all stages of the supply-chain by connecting members of the supply chain using EDI and technologies. The level of electronic messaging is 100% for many commonly used documents and the list of paper-based processes being converted to electronic form continues to expand.

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Source: Port Klang Authority.

Figure 3.18 Conceptual Image of Port Klang Community System

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Chapter 4 International Containerized Cargo Flow, Service and Facility for Handling International Cargo

4.1 Logistics Entities

4.1.1 Truck operators

The Cambodian truck industry consists of the following three segments. Class 1 members mainly international handle transport from/to Sihanoukville and cross border transport. There are fifteen members in all and they represent only 2% of the truck industry. Only 17 % of trucks are engaged in this group. They are formulating the CAMbodian Truck Association (CAMTA). This group of companies is providing not only transport service but also customs clearance and related logistics service in order to keep profitable. Even for the lower transport revenue and unavoidable empty return, the remaining service menus can compensate the profit. Some are operating at dry ports. CAMTA members are shown in the table below.

Table 4.1 List of CAMTA Members

No. Description Background Services Equipment/ Facilities Cambodia Cwt Dry 1 Unknown Unknown Unknown Port Cool Transport & 2 Unknown Unknown Unknown Logistics Co., Ltd. One-stop logistics, Lorry crane with capacity container Depot, ranging 5t to 7t, trucks Another yard in container & Bok Seng PPSEZ from 30t to 60t, 50t-crane 3 Sihanoukville, located conventional Trucking Dry Port Co., Ltd. with suitable lifting gears 3km from PAS services, project cargo stacker and 3 handling, custom warehouses clearance services Established in 1999 Logistics & freight Warehouses: 50,000 Hong Leng Huor as logistics and forwarding, road sqm, customs office, (Transport Imp.Exp 4 transportation transportation, CAMControl office, CY, & Dry Port) Co., company, on 15ha of warehousing and cargo-handling Ltd. (HLH) land, about 3km from distribution, customs equipment, warehouses,

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Final Report No. Description Background Services Equipment/ Facilities PP Airport, branches clearance, dry port CFS & repair workshop in Bavet, PP services Bonded warehouse, CY, customs clearance Established in 1996 Warehouse: 10,000 sqm, 5 MSE KPM Dry Port & documentation, on 10ha of land, CY: 27,000 sqm warehousing, container trucking, ICD inland port Transport, customs MS Overseas 6 Established in 1996 formalities & warehouse Unknown Transport Co., Ltd. operation Olair Dry Port 7 Worldwide Unknown Unknown Unknown Logistics Co., Ltd. transport, Customs 8 RL Co., Ltd. Established in 2002 Formalities and Unknown Warehouse operation R.N.Y 9 TRANSPORT Unknown Unknown Unknown CO.,LTD SBLL ICD & 10 Unknown Unknown Unknown Transport Co., Ltd. Dry port: 29,855 sqm, warehouse: 4,000 sqm, 182 trailers, 6 lorries, 3 Established in 2000, Customs clearance & forklifts & 4 cranes, 114 H/Q in PP, branches documentation, truck drivers, 5 standby in SHV, Bavet, Smach Sokan Transport trucking, sea-freight & drivers, 6 lorry drivers and 11 and Poipet, regional Co., Ltd. forwarding, dry port, 6 co-drivers, 2 forklift offices in BKK and warehousing and drivers, 4 crane drivers & HCM and other distribution 4 co-drivers, 5 countries technicians, 10 technical clerks, 5 staff and 2 team leader and 27 admin staff Dry port in PP: 10ha, Customs office, Established in 1999, CAMControl, H/Q in PP, branches Import-export LCL & CTN-handling equipment in SHV, Poipet, Bavet FCL cargo clearances, 12 So Nguon Dry Port for 20' & 40' (6 cranes), of Svay Rieng and inland transports, CTN depot up to 7,000 Trapeang Plong of warehousing & CY CTN, warehouse: 25,000 Kampong Cham sqm, 11 elevators, repair workshop 5 warehouses: 15,000m2, Established in 1996, Customs clearance, 1 dry port: 52,000m2, 12 Tec Srun Import 15 years of trucking depot container cranes & stacker: 25t to 13 Export Transport & experience, 4 storage, sea-freight, 50t, 12 forklifts: 02t to Dry Port Co., Ltd. branches in SHV, PP, transportation, cargo 3.5t, 160 modern trucks: Bavet and Poipet consolidation 30t to 40t, 280 trailers, 180 staffs and 170 drivers Customs clearance, documentation, ocean & air freight, land freight, open storage Teng Lay Deport & 14 Established in 1996 yard, dedicated Unknown Dry Port container freight station, warehouse management & stock inventory control

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Final Report No. Description Background Services Equipment/ Facilities Stock location, Established in 2014 warehouse for rent, Try Pheap Group 15 on 30ha of lands in local and international Unknown Co., Ltd. Kampong Speu shipping services, trucking CY, customs clearance Warehouses: 7,500 sqm and documentation, (including bonded Union Imp Exp & Established in 2012 trucking, warehousing, warehouse), CFS 16 Transport on 05ha of land shipping, transportation warehouse & general & logistics and bonded cargo warehouse, CY: warehouse 27,000 sqm (2,500TEUs), Land transportation, air freight, sea freight, customs brokerage, Vann Sophy exhibition logistics, Located in Thmei, Transport Co., Ltd. warehousing and 17 Malai, Banteay Unknown (VST) - VSDP Vann distribution, project Meanchey Sophy Dry Port cargo, dangerous cargo, valuable cargo and packing and removals & dry port Remark: as of 25 March 2015 Source: JICA Study Team.

The Class 2 group represents 7% of the operators and 24 % of trucks; the majority of them are officially registered but are mainly small and medium sized enterprises (SMEs). Their main field seems to be unofficial export and agricultural products, thus their profit margin remains low. The bank loan rate is so high (over 10%) that it is difficult for Class 2 operators to make the decision to invest in new trucks; thus, this leads to procuring second-hand trucks at lower prices.

The Class 3 group category consists of unofficial micro business operators. Trucks are ordinal aged and are likely to skip regular inspections. Their operations are on a day-to-day basis and their trucks are aged and already finished the depreciation period. In this group, an operator is likely to neglect the service standard like periodical service; only their low cost is their competitiveness.

In terms of international cargo, the Class 1 operators are the main players, facing the risk of competition from operators with aged trucks and unqualified drivers, and empty return cargo; those three factors are serious constraints for their business activities. Even with the deregulation for regional border crossing transport promotion, Cambodia is not necessarily active in this new movement.

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Table 4.2 Market Segmentation of Truckers

Class 1 Class2 Class3 % of operators 2 7 92 % of trucks 17 24 49 Status Officially organized and Not officially organized, No registration registered SME (small and medium No representation sized enterprise) Micro business Customers Container trucking Construction “grey export” Everything import/export, Spot cargo Anybody

Long-term customer relations Depreciation Considered Usually not consideration “live for just today’s food” Variable cost Lumps sum for drivers Probably also working for Fuel is purchased on black management lump- sum market Load Including empty haul in Include in price/wait for “Wait here for next load” management price/compensate with backload services Source: ADB, “Green Freight in Cambodia: Opportunities for Market- Based Interventions” 2014.

4.1.2 Dry Ports

There are more than ten dry ports in the vicinity of Phnom Penh. Some companies have a dry port in Bavet or Poipet (in 2010, a JICA study indicated only nine dry ports existed in Phnom Penh).

Many dry ports offer not only simple warehousing services but also customs clearance and transport services. Some dry ports, as international cargo handling facilities, offer services such as customs clearance for FTC/LCL cargo, storage at their own warehouses, delivery, cargo consolidation, and transport using their own vehicles. They are developing a structure to offer one-stop import/export service. In many cases, warehouses are used not only for their own storage but also as shipping companies’ CFS.

Some dry ports obtain bonded transport permission and offer bilateral transport services for consolidated cargo. It appears that Japanese companies have not established services using their own forces. They appear to be using the services and the facilities of these dry ports.

4.1.3 Forwarders

There are approximately 59 members in the Cambodia Freight Forwarder Association. However, there might be approximately 200 forwarders if non-members

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Table 4.3 List of CAMFA Members

No. Description Joined Y Remarks

1 ADDICON LOGISTICS (CAMBODIA) CO., LTD 2010 Regular member 2 AGILITY LOGISTICS LIMITED 2013 Regular member 3 AIR TIGER EXPRESS (CAMBODIA) CO., LTD 2014 Regular member 4 ALPHA FREIGHT LINKS CO., LTD 2014 Regular member 5 APL LOGISTICS (CAMBODIA) PTE.LTD 2012 Regular member 6 APPG GLOBAL CARGO CO., LTD 2016 Regular member 7 A.S.I LOGISTIC (CAMBODIA) LIMITED 2013 Regular member 8 BRANCH OF BEN LINE AGENCIES (CAMBODIA) 2016 Regular member 9 BOK SENG PPSEZ DRY PORT CO., LTD 2011 Regular member BRANCH OF BEE LOGISTICS CORPORATION 10 2013 Regular member (CAMBODIA) 11 BRANCH OF MP CONSOLE (S) PTE LTD 2015 Regular member 12 CAM FREIGHT SERVICES CO., LTD 2012 Regular member 13 CARGOTEAM S.L CAMBODIA LTD. 2012 Regular member 14 CBG LOGISTICS (CAMBODIA) CO., LTD 2016 Regular member 15 CHAY DA LOGISTICS CO. LTD. 2006 Regular member 16 C.H ROYAL INTERNATIONAL CO., LTD 2014 Regular member 17 COOL TRANSPORT & LOGISTICS CO., LTD 2014 Regular member 18 CRYSTAL WORLDWIDE LOGISTCS LTD 2015 Regular member 19 DAMCO (CAMBODIA) LTD. 2009 Regular member 20 DHL LOGISTICS (CAMBODIA).LTD. 2008 Regular member 21 DYNAMIC NETWORK LOGISTICS CO. LTD. 2011 Regular member 22 E FREIGHT SOLUTION INC 2015 Regular member 23 FEX LOGISTICS LIMITED 2012 Regular member 24 FWF FULL WELL FREIGHT PTE LTD. 2012 Regular member 25 G CARGO EXPRESS CO., LTD 2014 Regular member 26 GLOBAL LINK SERVICE PTE., LTD 2013 Regular member 27 HECNY TRANSPORTATION (CAMBODIA) LIMITED 2014 Regular member 28 HOYER TRANSPORT (CAMBODIA) CO., LTD 2013 Regular member 29 INTRA CO. LTD 2004 Regular member 30 KTSL GLOBAL TEAM CO., LTD 2015 Regular member KAMPUCHEA SHIPPING AGENCY & BROKERS 31 2006 Regular member “KAMSAB” 32 KUEHNE + NAGEL LTD. 2013 Regular member

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33 LINEHAUL EXPRESS (CAMBODIA) CO., LTD. 2004 Regular member 34 LIONS INTEGRATED LOGISTCS 2004 Regular member 35 LNL (CAMBODIA) CO., LTD. 2011 Regular member 36 NARITA LOGISTICS & SERVICES CO., LTD. 2004 Regular member 37 NIPPON EXPRESS (CAMBODIA) CO., LTD. 2016 Regular member 38 PANTOS LOGISTICS (CAMBODIA) CO., LTD. 2011 Regular member 39 PTM ASIA CO., LTD 2004 Regular member RAF INTERNATIONAL FORWARDING (CAMBODIA) 40 2004 Regular member INC. 41 RCS LOGISTICS (CAM) LTD 2015 Regular member 42 RDL LOGISTICS CO., LTD 2016 Regular member 43 R.N.Y TRANSPORT CO., LTD 2016 Regular member ROYAL CARGO COMBINED LOGISTICS (CAMBODIA) 44 2013 Regular member CO., LTD 45 RSL GLOBAL LOGISTICS CO., LTD 2009 Regular member 46 SDV CAMBODGE LTD. 2004 Regular member 47 SEATOP LOGISTICS (CAMBODIA) CO., LTD. 2016 Regular member 48 SHA TRANSPORT EXPRESS CO., LTD 2010 Regular member 49 SJ SHIPPING CO., LTD 2015 Regular member 50 STRAITS INTERNATIONAL PTE., LTD. 2008 Regular member 51 SWIFT FREIGHT LOGISTICS LIMITED. 2013 Regular member 52 THOMAS INTERNATIONAL SERVICES CO., LTD. 2004 Regular member 53 TRANSPEED CARGO (CAMBODIA) CO., LTD. 2004 Regular member 54 TRANS STAR FREIGHT PTE LTD. 2008 Regular member 55 TRIUMPH LINK LOGISTICS (CAMBODIA) CO., LTD. 2012 Regular member 56 TWIN LOGISTICS (CAMBODIA) CO., LTD 2014 Regular member 57 WORLDBRIDGE INTERNATIONAL (CAMBODIA) LTD 2012 Regular member 58 WORLDWIDE FORWARDING (CAMBODIA) CO., LTD 2013 Regular member 59 YUSEN LOGISTICS (CAMBODIA) CO., LTD 2016 Regular member

Remark: as of 25 March 2015. Source: CAMFA

The service content includes 1) customs clearance, 2) international shipment freight handling (marine, air transportation arrangements), 3) land transportation, and 4) common inland transportation in common. 5) service provision of storage, 6) supply chain management, 7) heavy-load transportation, 8) project cargo, and 9) goods to be moved, etc., are forwarder business performed as strength domain.

About the above-mentioned "customs clearance", the forwarder employs the

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registered customs specialist at his company, and it is forwarder's domain business.

In an interview survey, the customs clearance business association (it usually exists in many other countries) does not exist in Cambodia. Therefore, the business field of both forwarder and a customs broker is the same in Cambodia.

A forwarder can provide comprehensive service. However, the forwarder does not hold all institutions for the service.

For example, the forwarder entrusts transport business to other shipping agents, performs customs clearance and forwarding business, and provides total service. That is a service provider of a "non asset" type.

The only CAMFFA member dry port management company is the BokSeng Company.

Two Japanese companies which belong to CAMTA are similarly non-asset type forwarders. And two Japanese companies are good at the cross-border transportation, which uses the network with the ASEAN country.

4.1.4 Major Shipper (Japanese affiliated companies)

(1) Japanese Importer and Exporter

Recently, Japanese companies are accelerating their advance into Cambodia. According to the Phnom Penh Special Economic Zone (PPSEZ), the advancement of small- and medium-size enterprises (SMEs) is increasing. Cambodia intends to offer cross-border consolidated cargo transport as a support function of industrial complexes because the procurement and delivery volume of Japanese SMEs is small. Currently, only four Japanese transport companies offer consolidated cargo services, reflecting the low need. However, it appears that they cannot actually offer weekly transport service constantly. On the other hand, large enterprises use simple border-crossing procedures offered by SEZs to companies with preferential status. They have fewer problems in cross-border transport.

In addition, Japanese companies are periodically requesting the logistics improvement in the government-and-private joint conference, and the requests relevant to logistics are summarized as shown in Table 4-4.

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Table 4.4 Request from the Japan Side

No. Time Category Contents

･ The request about trade prohibition items, permission Continuation of restricted item, and approval procedure. topics ･ Clear statement of the public service charge structure and 2013 issue of the receipt in public procedure 9 November ･ Improvement of the ASYUCDA utilization ･ Unification of the duplication structure (GDCE, cam control, New topics Economic Police, etc.) in trade procedure ･ Introduction of AEO system as Cambodia version ･ Trade prohibition items, permission of the control item, the approval procedure. Continuation ･ Unification of the duplication structure (GDCE, cam control, 2014 topics 10 Economic Police, etc.) in trade procedure June ･ Introduction of AEO system as Cambodia version ･ Institutionalization of the temporary business open of the New topics customs ･ Export-and-import prohibition items, permission of the control Continuation limit item, the approval procedure 2014 topics 11 ･ Facilitation of trade procedure November ･ The faster promotion policy in Mekong River transport such as New topics the demonstration experiment service in nighttime. ･ Clear statement of public service charge structure and receipt Short-term issue 2015 subject 12 ･ Target list of Cam Control July Long-term ･ Speed up of export-and-import procedure subject ･ Commission of Cam Control 2016 Continuation 13 ･ The setup of operating charge during the off-hours of customs March topics operating (proposal of a PPSEZ model)

Source: JBAC.

As for customs clearance, a "quick procedure" is mentioned to the subject due to the implementation of ASYCUDA in the 12th joint conference

Some proposals have been improved and realized, including the ASYUCDA system, best traders scheme as the Cambodian AEO, and trial survey for nighttime navigating of the Mekong River. ASYCUDA development accelerates further demand to speed up the process for customs procedures at the 12th conference.

Unfortunately the Cam control issue remains and is not necessarily resolved. Cam control implies that all items do not necessarily need permission, but it is unclear what items need permits

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In China, wages went up with economic growth from the beginning of the 1990s. Then, the European and American textile industry decided to have a part of the Chinese labor-intensive industry transferred to Cambodia where wages were cheaper. The industry that transferred from China to Cambodia had many textile industries (fast fashion, a sport maker, etc.) and light industries (shoes, bags, etc.).

Then, the Cambodian government promulgated government act No.147 (2005) regarding the organization and function of CDC. By that government ordinance, the government established "the Cambodia special economic zone committee (CSEZB)" which is an organization for the SEZ management system. "Government act No.148 regarding installation and management of a special economic zone" was also promulgated by the same year.

In Cambodia the first SEZ to be approved by the government was the Poipet Special Economic Zone that was approved in June 2006.

1） Incentive of SEZ

Some SEZ provide the one stop service for customs including Cam control provided by MOC and MLVT staff. It usually takes one week to get duty exempted permission, a master list and a certificate of origin for preparations in advance outside of SEZ but it can be done within two days inside the SEZ. It takes around 1.5 hour for the procedure at the border including waiting time and 30 minutes for customs clearance because the procedure for import needs transportation ones and customs clearance at SEZ. The customs and Cam control at SEZ and dry ports are in the same places. These places can provide one stop service. FCL is using both of the SEZ, consolidation is using both of a dry port, and these places can provide the one-stop service.

Another reason for a Japanese company to move into an SEZ is to get Qualified Investment Projects (QIP) as investment preferential treatment. CDC is examining the QIP. The CDC has the authority to grant a QIP. For example, a company with QIP has the right to have import duties exempted. There are two types of QIP, e.g., an export market type and a domestic market type. Most Japanese companies located in Phnom Penh SEZ have each type of QIP. Based on an investigative survey, the companies, which moved into an SEZ, tended to acquire

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QIP easily.

Many Japanese companies have moved to SEZ. The reason is for avoiding risks in Cambodia. The procuring of land in Cambodia is difficult. In Cambodia, many land titles were lost at the time of the civil war. Therefore, Cambodia has a land acquisition risk regarding factory development for foreign investors. Until now, in Cambodia, there have been many troublesome occurrences regarding land for foreign investors. Especially Japanese companies have the tendency to move to an SEZ in which it is easy to procure land.

2） Current Situation of SEZ

The first SEZ which was put in operation in Cambodia is Phnom Penh SEZ, that started its operation in August 2008. To date, the CDC has approved 22 SEZ (see the table and figure below).

After SEZ with the function of export processing started, there was a change in the situation in Thailand, e.g., natural disaster, political turmoil, and wage rises, etc. The Japanese companies in Thailand have increasingly relocated to Phnom Penh SEZ for diversification of risks (Thailand plus one) as mentioned above.

There is a Poipet SEZ and Koh Kong SEZ near the border area between Thailand and Vietnam. The two special economic zones were developed for the companies located in Thailand. The management operator of Phnom Penh SEZ has a plan for a new SEZ development in Poipet. The new SEZ is performing attraction activities to the Japanese companies located in Thailand. On the other hand, the area near the Vietnam border with Cambodia has Manhattan SEZ and Tai Seng SEZ. Another two SEZ are working in addition to those. There are many Chinese companies and South Korean companies in the SEZ near the Vietnam border. The SEZ near the Vietnam border area has an advantage regarding the distance to Ho Chi Minh City. The convenience of the overland route transportation to Ho Chi Minh City became high last year. That is why the TSUBASA Bridge was developed. Therefore, the cooperation with the manufacturing industry in Ho Chi Minh City and SEZ near the Vietnam border is strong. However, electric power for the SEZ located near the Vietnam borrder is supplied from Vietnam. Therefore, the SEZ has an unstable electric power supply. Moreover, a large-scale labor dispute occurred in 2013. The

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large-scale labor dispute was the decline to advance the willingness of Japanese companies.

Remark: as of March, 2015. Source: JETRO HP.

Figure 4.1 Location of SEZ

Table 4.5 List of SEZ

Date of establishment 2006 From Bangkok 470km, from Phnom Penh 297km, from Laem Access Chabang Port 370km, from Sihanoukville 233km. Development area 336ha Facilities - 1. Koh Kong Tenant 4 companies. SEZ Tenant (Japanese) 2 companies. Yazaki (Japanese), Mikasa (Japanese), Camko Motor (Korean), KKN Major tenant Apparel (Thailand), Microelectronics Public (Thailand). Customs procedure Customs procedures are possible within SEZ. Tax Based on various regulations. Others SEZ located along the Thailand boundary. Date of establishment 2005 From Bavet to 6km, from Ho Chi Minh to 86km, from Phnom Penh to Access 2. Manhattan 160km. SEZ Development area 500ha Facilities Restaurant and mini-mart, etc. Tenant 33 companies.

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Final Report Tenant (Japanese) 1 company. Morofuji (Japanese), BESTWAY (), KINGMAKER (Hong Kong), FOREST (Chinese), SHEICO (Taiwan), AMPACT (USA), ANGKOR SPRING (Vietnam), EASTERN (Chinese), VISCA (Vietnam), TOP SPORTS (Taiwan /Malaysia), KAOWAY (Taiwan), WALLY (Chinese), ELITE (Singapore), FRONT (Chinese), SAN FENG (Taiwan), LONG Major tenant BRIGHT (Taiwan), GRANDY (Taiwan), JF (Taiwan), FELICITY (Taiwan), SYG (Taiwan), Power Jet (Taiwan), AMM (Taiwan), Yiqing (Chinese), Camelia (Hong Kong), BWE (Taiwan), TAN Mnih (Vietnam), Sunny Shang (Taiwan), Star Display (Taiwan), Southern Chean An (Chinese), Jifa Group (Chinese), Towa (Taiwan), Xie Feng (Taiwan) and etc. Customs procedure Customs procedures are possible within SEZ. Tax Based on various regulations. This SEZ is along the Vietnam border. Import of components and parts Others and export of finished goods utilize the port in Ho Chi Minh City. Date of establishment 27/10/2006 From the Phnom Penh international airport, 8 km and 15 minutes by car, Access From the Phnom Penh City 18 km and 15 minutes by car. Area: 358ha, First Phase: 141ha(completed), Second Phase: Development area 162ha(under construction), Third Phase: 57ha(planned) Facilities Bank, Dry Port, Restaurant, Mini Mart, Clinic. 3. Phnom Tenant 77 companies. Penh SEZ Tenant (Japanese) 42 companies. Art nature, Ajinomoto, O&M, Kyowa Seikan, Major tenant Clean Cycle, Combi, Sumitomo Denso, Taika, Tiger Wing, Denso, Marusan Plastis, Marunix, Minebea, Japan Rocks, Rohto, etc. Customs procedure Customs procedures are possible within SEZ. Tax Based on various regulations. Others PPSEZ is only in Phnom Penh and Japanese permanent residence. Date of establishment 2007 From Bavet 6km, from Ho Chi Min city 86 km, from Phnom Penh 160km, Access it is located adjacent to Manhattan SEZ. 125 ha (Expansion plan is 200ha), Main phase: 77 ha, Sub phase : 48 Development area ha. Facility Dry Port 4. Tai Seng Tenant 24 companies. Bavet SEZ Tenant (Japanese) 11 companies. Doko, Swany, Yorks, Nakayama, Lonchester, Towa, Vangogh Artits, Major tenant A&J, Smart Tech, Gingko, Tokyo Parts. Customs procedure Customs procedures are possible within SEZ. Tax Based on various regulations. This SEZ is near the Vietnam border. Import of components and parts Others and export of finished goods utilize the port in Ho Chi Minh City. Date of establishment 2008 From Sihanoukville port 12 km, from Sihanoukville airport 3 km, from Access Phnom Penh 212 km. Development area 1,113ha Bank, restaurant, hotel, market, dormitory, training center, vocational Facilities school, etc. 5. Sihanoukevi Tenant 79 companies. lle SEZ Tenant (Japanese) Major tenant Asre, ,Caffco, GGC, REBECCA, etc. Customs procedure Customs procedures are possible within SEZ. Tax Based on various regulations. Chinese SEZ, 300 companies invitation is a target. Hospital, and Others elementary school, etc. are planned. Date of establishment 2012 Sihanoukville port is nearby. From Sihanoukville port 15 km, from Access Phnom Penh 230 km. Cargo transport by rail between Phnom Penh and Sihanoukville (264 km) started from 2013.。 Development area 63ha 6. Sihanoukevi lle Port SEZ SEZ center (department of SEZ, One stop service station, rental office, Facility training center, logistics company), CFS (2,100m2), maintenance office, residence, dormitory, security, 24 hour security. Tenant 3 companies. Tenant (Japanese) 3 companies. Major tenant Ojitex Harta Packaging Sihanoukville(2013), Taiki Cambodia (2013),

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Final Report IS-TEC Cambodia (2014). Customs procedure Sihanoukville port is nearby. Customs clearance is available in this SEZ. Tax Based on various regulations. Support by the loan assistance of the Japanese government. It is Others directly linked with the Sihanoukville port and convenient for export and import Date of establishment 1/12/2012 From Vietnam 12 km, from Ho Chi Min 92 km, from Phnom Penh 154 Access km/ Development area 200ha, Stage 1：100ha Facilities Bank, restaurant, mini mart. 7. DRAGON Tenant 3 companies. KING SEZ Tenant (Japanese) 2 companies. Major tenant Nissei, Toko Kosen. Customs procedure Customs procedures are possible within SEZ. Tax Based on various regulations. The location is near the Vietnam border. Import of components and Others parts and export of finished goods utilize the port in Ho Chi Minh City. Date of establishment 11/9/2013 Access From Thai border 7 km, Laem Chabang Port 250km. Development area 67ha Dry Port, bank, restaurant, hotel, market, dormitory, training center Facilities (planned). 8. SANCO Tenant 5 companies. POIPET Tenant (Japanese) 5 companies. SEZ Major tenant Automobile Electronic parts assembly. Customs procedure Customs procedures are possible within SEZ. Tax Based on various regulations. Developer is Japanese company. The location is along Thai border. Others Transshipment is unnecessary. Remark: as of March 2015. Source: JETRO HP

3） Future Plan

The government of Thailand has a plan to develop a new SEZ near the border with Thailand as an activation policy of a local city. The Thailand government has an SEZ development plan in the Aranyaprathet area. In the future, there will be competition in attracting enterprises between the future Poipet SEZ development and SEZ in the Aranyaprathet area where the Thai government is planning to establish one.

A new special economic zone in Kandal’s Takhmat district aiming to make Cambodia into a regional logistics hub held an official groundbreaking ceremony on July 1st 2015. The SEZ includes building the Kingdom’s first customs-free warehouse. It is expected that the SEZ might provide jobs to nearly 25,000 employees and potentially attracting forging investment of more than 300 million.

4） Future Trend

Until now, the European and American textile industries (capital from China, South Korea, Taiwan, and Malaysia, etc.) progressed centering on Phnom Penh based on its high population accumulation. Then, the Japanese companies have advanced to SEZ.

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The SEZ became a production base of the Japanese companies. The pattern of advance of a Japanese company is to move the partial processes (labor-intensive wire harness manufacture, car parts, etc.) of the mother factory located in Thailand and Vietnam to an SEZ in Cambodia. Many Japanese companies, which moved into an SEZ, acquired various extraterritorialities on tax laws and the convenience of export-and-import procedures and so on.

It is thought that a SEZ plays an important role as a source of foreign investment attraction. A SEZ has various preferential treatments and easy land acquisition.

Soon a large-scale beverage manufacturer with US capital and Vietnam capital are going to move to Phnom Penh SEZ. The manufacturing industries other than Japanese companies are increasing in number.

From now on, in ASEAN, it will seem that economic integration (ASEAN Economic Community) and local economic partnerships (Comprehensive Economic Partnership) will progress. Moreover, development of a southern economic corridor is being advanced in Cambodia. By the development of a southern economy corridor, it is thought that the cooperation between Thailand and Vietnam companies would be promoted. Therefore, the incentive of direct investment into Cambodia from Thailand and Vietnam also would increase.

However, if the movement of foreign companies into Cambodia increases, an increase in labor wages is forecast. There is a human resources bonus in Cambodia for a while. Currently, workers can be supplied to a SEZ from a farm village. However, a rise in wages due to a shortage of workers is assumed in the long run. The Cambodian government decided upon IDP and is promoting the transformation from labor-intensive to the high added value industry.

4.2 Current Condition of Export and Import by Customs Data

The current condition of export and import could be understood based on the customs clearance data provided from GDCE. In the export and import volume in Cambodia, it is seen to be dependent on specific countries (see the table below), e.g., China, Hong Kong, Singapore,Thailand, Vietnam, etc.The ranking between net weight and custom value does not get into line.

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Table 4.6 Export and Import Ranking by Countries Export Import Country Net Weight Customs Value Net Weight Customs Value 2013 2014 2013 2014 2013 2014 2013 2014 CN 3 1 8 7 3 2 1 1 HK 28 22 2 1 9 7 5 3 SG 1 10 3 3 5 5 8 6 TH 2 3 9 19 1 1 3 2 US 4 2 1 2 11 11 2 10 VN 8 4 16 17 2 3 4 4

Source: GDCE

The Table 4.7 shows major trading countries in Cambodian trade in regard to net weight. The section in the table means the category of trading goods.

Table 4.7 Export and Import Volume of Top Three Sections of Top Three Countries

2013 2014 im/ex Country section Net Weight (t) Ratio im/ex Country section Net Weight (t) Ratio 2 81,251 9.3% 2 144,254 17.3% CN 7 42,840 4.9%CN 7 37,406 4.5% 9 45,164 5.2% 9 96,100 11.5% 2 4,243 0.5% 4 33,085 4.0% SG 4 4,131 0.5%TH 5 76,600 9.2% export 5 206,800 23.6%export 17 38,443 4.6% 2 88,000 10.0% 11 157,203 18.8% TH 4 71,943 8.2%US 12 8,050 1.0% 5 16,901 1.9% 15 3,013 0.4% Subtotal 777,486 88.7%Subtotal 755,590 90.5% Total 876,310 100.0%Total 835,295 100.0% 11 254,822 5.7% 11 829,568 7.5% CN 13 228,038 5.1%CN 13 881,354 7.9% 16 83,449 1.9% 15 292,208 2.6% 4 138,262 3.1% 4 342,392 3.1% TH 5 1,513,160 33.9%TH 5 3,156,241 28.4% import 6 134,982 3.0%import 6 327,084 2.9% 4 91,838 2.1% 5 883,430 7.9% VN 5 496,584 11.1%VN 6 693,168 6.2% 6 268,797 6.0% 15 348,629 3.1% Subtotal 3,547,974 79.6%Subtotal 8,508,729 76.5% Total 4,458,380 100.0%Total 11,116,156 100.0% Source: GDCE

Table 4.8 shows high ranking section (goods category) in Cambodian trade via major border points: Poipet, Bavet, Phnom Penh Port and Shihanoukville Port.

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Table 4.8 Export Volume of Section of Border (2015)

Net Weight (t) Customs Value (million USD) section Bavet PP Port Poipet SHV Ratio Bavet PP Port Poipet SHV Ratio 1 41 73 59 29 0% 104 722 157 352 0% 2 0 152,156 524 432,686 83% 24 340,204 475 1,003,419 53% 3 302 12,472 2% 247 26,264 1% 4 1,998 3,694 25 8,058 2% 12,284 5,526 128 86,424 4% 5 2 300 0% 9 122 0% 6 2 27 93 3,625 1% 134 337 1,033 8,297 0% 7 400 10,413 1 8,304 3% 1,062 28,549 14 12,276 2% 8 50 1,470 32 336 0% 128 1,001 1,539 7,561 0% 9 8 7,334 2 893 1% 37 4,451 20 1,160 0% 10 7 1 1 31 0% 152 218 21 328 0% 11 867 11,495 354 19,133 5% 59,836 9,278 22,455 209,717 12% 12 2,250 0% 41,190 2% 13 88 630 0% 11 262 0% 14 0 0% 4 0% 15 3,930 682 1,400 8,932 2% 20,843 3,311 3,797 37,473 3% 16 152 36 3,538 1,549 1% 2,718 3,286 98,731 104,193 8% 17 311 45 3,739 378 1% 35,891 327 259,381 37,626 13% 18 22 281 0% 10,753 10,613 1% 19 0% 0% 20 2 85 60 436 0% 111 1,343 258 3,910 0% 21 1 0% 32 0% 22 216 1 379 0% 10,090 5 3,158 1% Total 7,856 188,029 9,851 500,702 100% 133,335 408,890 398,780 1,594,376 100% Ratio 1.1% 26.6% 1.4% 70.9% 100% 5.3% 16.1% 15.7% 62.9% 100% Source: GDCE

Table 4.9 Import Volume of Section of Border (2015)

Net Weight (t) Customs Value (million USD) section Bavet PP Port Poipet SHV Ratio Bavet PP Port Poipet SHV Ratio 1 104 628 8,644 4,401 0% 799 1,029 64,338 27,313 0% 2 5,263 35,335 12,463 83,321 3% 13,046 64,145 11,528 176,404 1% 3 473 934 424 5,731 0% 1,112 2,123 2,735 22,068 0% 4 24,685 70,816 170,377 239,372 13% 62,139 185,308 473,296 1,598,275 9% 5 13,757 18,028 992,783 120,045 29% 7,759 32,532 363,471 125,789 2% 6 15,747 46,685 120,564 84,422 7% 102,656 232,719 219,155 575,971 4% 7 9,344 13,438 12,503 63,668 3% 86,063 93,200 81,931 662,541 4% 8 917 1,962 572 5,337 0% 24,566 63,792 30,853 758,620 3% 9 7,650 5,671 1,056 2,541 0% 19,621 14,916 2,711 10,992 0% 10 6,764 15,236 43,241 70,772 3% 42,757 60,492 112,811 416,820 2% 11 66,685 26,541 10,114 319,590 11% 1,937,243 601,290 214,594 7,906,785 41% 12 3,088 3,312 691 11,487 0% 33,748 61,250 7,481 138,367 1% 13 32,585 397,083 159,307 27,888 16% 44,794 312,489 112,601 55,926 2% 14 2 17 0 5 0% 121 1,122 64 495 0% 15 25,556 40,611 6,740 100,754 4% 147,367 172,121 57,256 763,142 4% 16 15,714 24,484 22,395 98,758 4% 211,101 361,018 230,342 2,238,290 12% 17 2,673 3,656 63,804 107,364 5% 44,583 101,818 1,489,641 1,191,561 11% 18 632 398 29 3,214 0% 16,281 18,072 12,399 164,223 1% 19 1,174 0% 159,583 1% 20 10,624 5,360 1,236 10,231 1% 119,451 58,626 21,532 343,656 2% 21 3 1 0% 657 26 0% 22 292 2 730 0% 5,492 13 5,426 0% Total 242,261 710,488 1,626,948 1,360,806 100% 2,915,208 2,443,556 3,509,410 17,342,274 100% Ratio 6.1% 18.0% 41.3% 34.5% 100% 11.1% 9.3% 13.4% 66.2% 100% Source: GDCE

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The Definition of Section is as listed in the table below.

Table 4.10 List of Definition of Section

No Section Description 1 SECTION 1 Live animals; animal products 2 SECTION 2 Vegetable products Animal or vegetable fats and oils and their cleavage products; prepared edible fats; 3 SECTION 3 animal or vegetable waxes Prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured 4 SECTION 4 tobacco substitutes 5 SECTION 5 Mineral products 6 SECTION 6 Products of the chemical or allied industries 7 SECTION 7 Plastics and articles thereof; rubber and articles thereof Raw hides and skins, leather, fur skins and articles thereof; saddlery and harness; 8 SECTION 8 travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut) Wood and articles of wood; wood charcoal; cork and articles of cork; manufactures 9 SECTION 9 of straw, of esparto or of other plaiting materials; basket ware and wickerwork Pulp of wood or of other fibrous cellulosic material; waste and scrap of paper or 10 SECTION 10 paperboard; paper and paperboard and articles thereof 11 SECTION 11 Textiles and textiles articles Footwear, headgear, umbrellas, sun umbrellas, walking sticks, seat sticks, whips, 12 SECTION 12 riding-crops and parts thereof; prepared feathers and articles made therewith; artificial flowers; articles of human hair Articles of stone, plaster,cement,asbestos, mica or similar materials; ceramic 13 SECTION 13 products; glass and glassware Natural or cultured pearls, precious or semi-precious stones, precious metals, 14 SECTION 14 metals clad with precious metal and articles thereof; imitation jewellery; coin 15 SECTION 15 Base metals and articles of base metal Machinery and mechanical appliances; electrical equipment; parts thereof; sound 16 SECTION 16 recorders and reproducers, television image and sound recorders and reproducers and parts and accessories of such articles 17 SECTION 17 Vehicles, aircraft, vessels and associated transport equipment Optical, photographic, cinematographic, measuring, checking, precision, medical or 18 SECTION 18 surgical instruments and apparatus; clocks and watches; musical instruments; parts and accessories thereof 19 SECTION 19 Arms and ammunition; parts and accessories thereof 20 SECTION 20 Miscellaneous manufactured articles 21 SECTION 21 Works of art, collectors pieces and antiques 22 SECTION 22 Special Transactions not classified according to kind Source: WTO.

4.3 The condition of the export industry in Cambodia

The government is promoting to export 1 million tons of milled rice per year as a national goal. This study is the international logistics survey focusing on international container traffic. In order to arrange typical freight flow for international trade in Cambodia, the current condition of the export industry is investigated in this section.

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At first, the current condition of rice (milled rice), textiles, and shoe products as typical export goods in Cambodia are investigated. The actual logistics conditions and issues in Cambodia are analyzed and stated.

4.3.1 Rice (Milled Rice)

(1) Production

The rice of Cambodia is roughly classified into three types. There are 1) Fragrant Rice that is grown centering on the north-east area in the rainy season, 2) traditional Non-Fragrant Rice that is grown in the south-west area and the Vietnam border in the rainy season, and 3) IRRI, which is the improvement-of-a-species rice, that was developed by the international rice research institute in Manila, which grows in the same areas as traditional Non-Fragrant rice in the dry season.

The major rice production area is a damp area around Lake Tonle Sap, Mekong River, and Bassac River, which includes the land from the northeast area to the southwest area of Cambodia. Fragrant-rice is grown in the northeast area near the Thailand boundary. Additionally, IRRI rice is grown in the southwest area and the Vietnam border area.

According to a WB survey, about 50% of the total production of rice is traditional Non-fragrant Rice. The plantation area of Non-fragrant Rice is around Phkar Khney, Meang Minh, and Neang Khon. The production volume of IRRI rice occupies 25 to 30% of total rice production in Cambodia. The volume of the remaining 20% is Fragrant Rice. These days, Fragrant-rice production in the Batdambang area is increasing.

The number of large-scale rice-milling companies in Batdambang and in Phnom Penh who mill rice has been increasing in recent years. However, the middlemen from Thailand and Vietnam mostly purchase paddy in Cambodia. And the purchased paddy is milled in Thailand and Vietnam, and is exported after that.

In recent years, the rice export from Cambodia has been soaring rapidly. In 2008, the export volume of Cambodia was about 10,000 tons. In 2010, the export volume increased to 51,000 tons. In 2011, the export volume increased rapidly to 175,000 tons. Furthermore, the export volume increased to 538,000 tons in 2015. However,

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the export volume could not reach to the governmental policy target (1 million tons).

Major Cambodian milled rice is exported to EU. The EU has given preferential duty treatment to Cambodia, and it is thought that there is a great deal of export to EU. The Table 4.11 shows the export share of EU was 63.1%, China is 21.7%, and ASEAN countries is 11.8% Table 4.11 Major Exported Countries of Milled Rice from Cambodia Destination (2015) Ton Share

EU 339,978 63.1%

ASEAN member State 63,601 11.8%

Other 134,817 25.0%

(China) (116,638) (21.7%)

Total 538,396 100.0%

Source: SOWE-REF Report (2015)

Most of the volume of rice exported to EU from Cambodia is fragrant-rice. Most of the volume of milled rice from Cambodia to others is non-fragrant-rice.

Many of the rice-milling companies (middle and large-scale) of Cambodia are located along the southern economic corridors, such as Phnom Penh, Battangbang, and Kampong Cham. In recent years, the government has provided supporting policies to the rice-milling companies, e.g., tax breaks for milling machine investment, etc.). As a result, the rice-milling companies have increased their investments, and rice-milling capability is going up. Many small-scale rice-milling business are being located near the rice production area. Small-scale rice-milling businesses remain at a low level in regard to drying equipment, rice-milling technology, and storage facilities. The major issue for small-scale rice-milling businesses is thought to be its rice-milling quality.

(2) The Present Condition and the Challenges in Transport and Logistics

The transportation modes for the rice from the farmers to the rice-milling companies and businesses are mostly light trucks and 10-ton trucks. Paddy is conveyed to middle and large-scale rice-milling companies from the cooperative of each rice production y area. Many farmer’s cooperatives in the rice production areas co-own or own their own 10-ton truck. The rice-milling companies located along the southern economic corridor have conveyed rice to the Phnom Penh and Sihanoukville Ports by

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40-ton trucks according to local logistics companies. As for the transportation to Thailand and Vietnam from a production area, 40-ton trucks are mainly used.

The milled-rice, which has been transported to Phnom Penh, is transshipped to containers in Phnom Penh. After that, many of the containers are transported to Sihanoukville Port by trucks. Then, the containerized cargo at Sihanoukville Port is mostly conveyed by ship to EU or Russia via Singapore or Hong Kong.

On the other hand, much of the paddy carried out of Phnom Penh port by 40-ton trucks are moved from the truck to a barge in the Phnom Penh Port. Then, the bulk cargo (paddy) is conveyed by river transport to rice-milling companies in Ho Chi Minh2.

According to a report from MAFF, about 70% of the milled-rice exported through Sihanoukville Port and about 30% are conveyed via the Phnom Penh Port. If a railroad could be developed from the Battanbang and Kampong Cham area to Phnom Penh, milled rice transportation by rail traffic will be realized. It is thought that the transport cost of rice would be reduced. As a result, the export of the rice from Cambodia was expanded.

Moreover, if barge transportation of the rice from Battanbang or Kampong Chhnang can be performed, it is possible that the logistics cost might be reduced. As a result, it is thought that the milled rice export from Cambodia would contribute to further expansion.

The major challenge in the effort to attain the policy objective of milled-rice export, is the trucking from the plantation area to the rice-milling businesses and companies. The local road that is the paddy collection route in the rainy season has not been paved. Therefore, the trucking from the plantation area to the rice-milling businesses and companies is difficult. Moreover, if the harvest time of rice becomes more concentrated, the transportation cost will rise due to the lack of the number of trucks. In order to solve the challenge in regard to milled-rice export from Cambodia, it is necessary to improve the drying capability and the storage facilities in the plantation area. As a result, the amount of transport volume of rice might equalize

2The Cambodian government is planning to encourage rice-cleaning export as a state policy, and to lose paddy export. However, development of laws concerning a paddy export ban is not performed yet.

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(the seasonal variation would become small). And the transportation cost can be reduced.

4.3.2 Textiles

(1) Current Conditions of Production

The textile industry in Cambodia started in the middle of the 1990s because a part of the textile industry in China transferred to Cambodia (China-plus-one) due to increasing wages by economic development in China. SEZ had not been initiated yet in Cambodia at the time. Therefore, the Chinese textile industry advanced to the Phnom Penh area in Cambodia. Then, the textile industries of Taiwan, South Korea, Hong Kong, and Malaysia continued the move.

In 2008, in response to the influence of a global monetary crisis, the direct investment in the textile industry of Cambodia decreased. The production level of the textile industry of Cambodia is leveling off after the crisis. The world market prices for textiles fell after the crisis. The textile industry is moving to newly emerging countries, e.g., Bangladesh, Myanmar, etc. as new production bases for EU. The textile industry of Cambodia has been forced to change the present production system and quality level.

The textile industry of Cambodia has employed many cheap laborers. In 2008, there were 300,000 employers that the textile industry of Cambodia created. The foreign-affiliated fabric company generally employs 1,000 or more workers per company. The large-scale factory employs 5,000 or more persons per company. On the other hand, a local capital employs about 500 persons per company. Moreover, a local capital employs young women. Many workers were discharged at the time of the crisis in 2008. The employment condition of the textile industry in Cambodia can be said to be very unstable.

After an SEZ near the Vietnam border was developed, China, Taiwan, and the South Korean capital developed factories in the SEZ. However, a labor dispute broke out within the SEZ near the Vietnam border in 2013. Under the influence of the labor dispute, the Cambodian government raised the minimum wage in 2015.

The SEZ near the Vietnam border depends on Vietnam for its electric power supply.

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The SEZ has an unstable electric power supply due to the conditions by the Vietnam economy. Therefore, the textile industry in the SEZ near the Vietnam border has a risk of an unstable electric power supply.

A part of the textile industry of Cambodia was transferred in the suburbs along NR.2 in recent years. According to the investigations of the JICA Study Team, the main reason for this is that the labor rates around Phnom Penh have gone up recently.

(2) The Present Condition and the Challenges in Transport and Logistics

Now, in Cambodia, the raw materials for many textiles are imported from China and Taiwan. Moreover, the volume of imports from Vietnam is also increasing according to the to local logistics companies, makers and SEZ management companies. On the other hand, many of the finished textile goods are exported to the U.S. and EU. Many of the export routes go via Sihanoukville Port (EU). Now, the U.S. and EU have given the privilege of a preferential duty to the textiles of Cambodia. The basis of the privilege from the U.S. is the Bilateral Untied States-Cambodia Textile and Apparel Agreement. The privilege of EU is for everything but arms (EBA) initiative. Therefore, as for the textiles of Cambodia, the import duty is exempted in the U.S. and EU. In Japan and Cambodia, goods trade liberalization went into effect by the framework of ASEAN comprehensive economy cooperation on December 1, 2008.

The raw material of many textiles is imported via Sihanoukville Port, Phnom Penh Port and a land route from Ho Chi Minh. Textile goods have generally low added value. Therefore, the textile industry does not keep much stock. Textile fibers are stockpiled around Phnom Penh so that the industry can take advantage of buyers' consolidation as a transportation method. The buyers' consolidation method is to aggregate the finished product at the factory and the dry port. Many of the finished products, via the Sihanoukville Port, have been transported to the warehouses located in the and the EU.

The finished textile goods have low added value. Therefore, the transportation cost ratio in finished-goods is high in general. And if the ratio of the logistics cost of textiles increases, the profit ratio of the retail (client) in the West will be compressed. Since the textile industry of Cambodia has weak bargaining ability, a logistics cost

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rise has big influence on the continuous business operation of the textile industry in Cambodia.

4.3.3 Shoe Products

(1) Present Condition on the Production Side

The production volume of the shoe products in Cambodia has increased quickly from 2005. The reason on the supply side is that the manufacturing cost in Vietnam and Thailand became high. On the other hand, as for the demand side, the tariff preferential treatment called EBA initiative in EU has greatly influenced this.

The number of shoe manufacturers in Cambodia is about 40. Shoe manufacturers in Cambodia are affiliated with many foreign firms in China, Taiwan, Hong Kong, and Japan. Many are carrying out OEM production for other companies. Moreover, foreign shoes sales companies may have given the shoe companies of Cambodia orders directly. Many of the shoe manufacturers of Cambodia are located in the Phnom Penh and Kandar Provinces.

A shoemaker's number of employees in Cambodia is about 1,500 people on average. The maximum number of employees of a shoemaker in Cambodia is about 7,000 people. Skillful technology is required for shoe manufacture with many processes. Therefore, the wage level of shoe manufacturers is relatively higher than the other manufacturing sectors.

(2) The Current Condition and the Challenge of Transportation and Logistics

Raw materials (leather, textiles, etc.) are mainly imported from Asia. The raw material is imported from vendors in China, Thailand, Taiwan, South Korea, and Vietnam. The import route for the raw material is from Sihanoukville Port and Phnom Penh Port. Moreover, it is conveyed by land transportation from Ho Chi Minh City.

About 60% of the shoe products (finished goods) of Cambodia are exported to the EU. Many shoe products (finished goods) of Cambodia are exported to U.K. and . Export destinations other than the EU are Japan, the U.S., etc. The transportation route to EU mainly goes via Sihanoukville Port. The export route to Japan is carried to Ho Chi Minh City over the road. Then, it uses marine transportation to Japan.

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The production process of the shoe products in Cambodia includes the last process of the international supply chain. An important feature of shoe products is that they have higher added value than textile products. Moreover, seasonal variations are few compared with textiles.

4.4 International Containerized Cargo Flow

4.4.1 International Container Cargo Flow

The figure 4.2 and 4.3 show the outline of international container flow.

Poipet 2 1 Bavet PNH

24

2 93.5 59 13.5 SHV SEZ HCMC BK& OT 83 15

Road

LCB SHV Rail

Water

122

Unit：1,000 TEUs PNH: Phnom Penh (Cambodia), SHV: Shihanoukville, LCB: Laem Chabang (Thailand), HCMC: Hochiminh City (Vietnam) Source; JICA Study Team

Figure 4.2 Container Flow (export)

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10 35 Poipet Bavet PNH

70 10

40

3.5 SHV SEZ HCMC

148.5 Road 15 Rail SHV LCB Water

167 110

Unit：1,000 TEUs PNH: Phnom Penh (Cambodia), SHV: Shihanoukville, LCB: Laem Chabang (Thailand), HCMC: Hochiminh City (Vietnam) Source; JICA Study Team Figure 4.3 Container Flow (export)

The following figures show the summary of international container flow by the target route.

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LCM Port Bangkok LCM: Laem Chabang Custom Procedure Point Export' (Distance: 240 km) Lat Krabang ICD 2%#0%# (9,851ton/y) (Time: 5 hour) ICD: Inland Container Depot Aranyaprathet

98%# (Distance: 0 km) (Time: 1‐4 hours) Poipet# Transit#to#domes4c# Transit#to#SEZ# Poipet (within#20km)# Import' (1,626,948ton/y)

22%$ Ex/importer SEZ in Warehouse in Poipet Poipet in Poipet 50%$ 28%$

Poipet$ Transit$to$domes4c$ Transit$to$SEZ$ Phnom Penh (within$20km)$ (SEZ, others) Source: GDCE Figure 4.4 Bangkok-Phnom Penh Route (Land)

Custom Procedure Point Export' HCM city Cat Lai port Cai Mep port (7,856ton/y)

(Distance: 70 km) (Time: 16 hour) Moc Bai

(Distance: 0 km) (Time: 1‐2 hours)

(242,261ton/y) Bavet Import'

21%$ 31%$ Ex/importer SEZ in Dry Port in Bavet Bavet in Bavet 48%$ (Time: 7.5 hour)

Bavet$ Transit$to$Domes5c$ SEZ$(Manha= an&Tai$Seng)$

Phnom Penh Source: GDCE

(SEZ, others) Figure 4.5 Ho Chi Minh-Phnom Penh Route (Land)

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Customs Procedure Point

All of Cambodia Import' (710,448ton/y) 2%$ Dry port in Phnom Penh

98%$ Phnom Pen Port PPAP$ Others$ (188,029ton/y) Export'

(Distance: 340 km)

(Time: 40 hours) 23%$

Ho Chi Minh Port 77%$

Cai Mep Port PPAP$ Others$

Source: GDCE Figure 4.6 Vietnam-Phnom Penh Route (Inland Waterway)

Customs Procedure Point Rail Truck Phnom Penh Railway SEZ/Dry port in Import' (1,360,806,448ton/y) ICD Phnom Penh

3%$ 14%$

(Distance: 250 km) (Distance :22km) (Time: 11h) (Time: 5h) 83%$

SHV$port$ SHV$SEZ$ Others$ Sihanoukville Port Export' (500,702ton/y)

28%$

0%$ 72%$

SHV$port$ SHV$SEZ$ Others$ Source: GDCE Figure 4.7 Phnom Penh-Shihanoukville (Road and Rail)

4.4.2 Logistics Cost

Logistics cost vary greatly depending on the shipper’s status, loads, market, time, the quality of truck and service level. This survey shows the costs of taxable importing

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International Land Logistics cost divides two parts, 1) the forwarding charge in Thai, Vietnam and Cambodia, 2) transportation costs in each. The charge of Cambodian forwarder accounts for a large share of overall logistics cost among both Thai and Vietnam routes. Forwarder companies impose each work on charge. Taxable goods need valuation assessment at GDCE as first step and ASYCUDA declaration as second step at border point. Compared to Thai and Vietnam, the customers feel that logistics cost in Cambodia is more expensive.

The forwarder charge in Thai and Vietnam can be lower because Thai adopts E-CUSTOMS as custom clearance and Vietnam does V-NACCS. These systems can reduce the work of custom clearance because these share custom clearance information at exit point with entry point. The main reason of increasing cost of custom clearance is that the customers have to show each document at the border. The cost of forwarding in Vietnam can reduce 50 USD as import declaration, 150 USD as border declaration and 50 USD as service charge.

However, companies of QIP and SEZ can reduce these costs because the volume of work at first step is little (or none). It is possible for them to reduce 250 USD as forwarding cost compared to normal taxable goods. Furthermore, the cargo of best trader from Thailand or double license from Vietnam, which are not required transshipment at the border, can reduce the cost of transshipment.

If the cargo status is not required, the cheapest logistic costs are 1,800 USD from Thailand and 1,000 USD from Vietnam.

Table 4.12 Bangkok-Phnom Penh (as 40 foot Container)

Item US$ Thailand side Forwarding charge (incl. customs process 200 handling operation) Transport charge 700 Cambodian side Forwarding charge for import permit process 230 Forwarding charge for declaration process 200 Customs processing fee (official rate) 15 Cam control (official) 63 Scanning （official） 32 Container transshipment 100-150

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Final Report Item US$ Transport to PP 600 Total 2,140 Source: JICA Study Team Footnote: The prices in the above table were based on the field survey to several local logistics companies handling import taxation cargos in March 2016.

Table 4.13 Vietnam-Phonm Penh (as 40 foot container)

Item US$ Vietnam side Forwarding charge (incl. customs process 250 handling operation) Transport charge 200 Cambodian side Forwarding charge for import permit process 230 Forwarding charge for declaration process 200 Customs processing fee (official rate) 15 Cam control (official) 63 Scanning （official） 32 Container transshipment 100-150 Transport to PP 300

Total 1,390 Source: JICA Study Team. Footnote: The prices in the above table were based on the field survey to several local logistics companies handling import taxation cargos in March 2016.

The following figure shows the international logistics cost (excluding forwarding cost) in Cambodia.

160km 410㎞ 4hours 10hours $250 $500 Poipet PNH Bavet LOLO 90km 260 km Imp. $47 2hours 5hours Exp. $47 $150 $600 220km THC $120 6hours $220 incl. NR.4 Tariff 240km 11hours 340km SHV $100 Rail 40hours $80 Truck $250 barge BK& $22 Port $150 Truck HCMC OT

12km LOLO 0.5hours Imp.$20 LOLO LOLO $100 Exp.$20.6 Imp.$22 Imp. $70 THC $83 LCB Exp.$17 SHV Exp. $24 THC $80 THC $120

Excluding Forwarding Cost PNH: Phnom Penh (Cambodia), SHV: Shihanoukville, LCB: Laem Chabang (Thailand), HCMC: Hochiminh City (Vietnam) Source; JICA Study Team Figure 4.8 Container Transport Cost

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Table 4.14 Laden Container Flow in Cambodia (2015)

Import TEUs =1.5x Box, Export TEUs =1.2x Box Distance and time don’t include custom clearance time and fee. Source: PAS, PPA, RRC, GDEC, transportation cost by JICA Study Team in 2014.

The logistics cost consists basically of forwarding charge part and transportation charge. The forwarding cost in Cambodia is more expensive in comparison to the neighboring countries, Thailand and Vietnam.

Source: JICA Study Team.

Figure 4.9 Structure of Logistics Cost

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Table 4.15 Comparison of Forwarding Charge

Source: JICA Study Team.

$/Km/Teu Turck Viet

truck Thai

truck Cam

0 0.5 1 1.5 2 2.5

Figure 4.10 Comparison of Unit Cost of Transportation

Source: JICA Study Team.

4.4.3 Maritime Transportation Routes

(1) Maritime Network in the world

1） Trade Volume

The world container movements are shown in origin/destination region matrix in Table 4.15 below. The exports from East Asia (a total of Far East and Southeast Asia) amount to 93.8 million TEUs, which represents a 60.0% share of total world exports. The major destinations are East Asia, Europe, and North America etc. The imports into East Asia amount to 68.2 million TEUs with 43.7% share in the world total imports. 48.1 million TEUs are moving inside East Asia on so-called “Intra-Asia trade” which is the world largest intra-regional trade.

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Table 4.16 Region-to-Region Container Trades in 2014 (in ‘000TEUs Carried Onboard)

(unit: '000TEUs carried onboard) Share in East South Western North South ↓from to→ Oceania Europe Africa Total the world Asia Asia Asia America America exports East Asia 48,100 2,154 2,537 3,390 15,400 2,705 15,165 4,323 93,775 60.0% Oceania 1,700 281 172 140 189 54 172 32 2,739 1.8% South Asia 1,223 86 708 596 1,467 274 804 155 5,312 3.4% Western Asia 1,203 122 418 1,764 1,047 336 378 40 5,308 3.4% Europe 6,961 399 810 2,571 4,262 1,686 3,829 1,694 22,212 14.2% Africa 597 28 182 64 962 597 191 60 2,682 1.7% North America 7,087 243 546 849 2,567 340 96 2,522 14,250 9.1% 1,325 82 93 277 2,271 278 2,699 2,871 9,896 6.3% Total 68,195 3,397 5,467 9,651 28,165 6,271 23,333 11,696 156,174 100.0% Share in the 43.7% 2.2% 3.5% 6.2% 18.0% 4.0% 14.9% 7.5% 100.0% wrorld imports Source：MOL Research Office, calculations based on Drewry, IHS Global Insight, Seabury, CTS, Piers, conference statistics etc.

2） Hub and Spoke System

As a result of shipping lines’ attempts to reduce their network costs with the economic scale, many large container ships are now deployed in the East-West trade lane including Asia/North America mainline, Asia/Europe mainline etc. where huge volumes of containers are moving. To optimize the economic effect of that deployment, a “Hub and Spoke System” has been developed by the shipping lines.

Major hub ports ranked at the top group in the world are located on the East-West trade lane, and the North-South trade lanes are branching from some hub ports as illustrated in Figure 4.9. When looking at the containers transshipped at those hub ports, some of them may be moving between different mainlines, while others may be moving from mainlines to feeders. Mainline-to-mainline transshipments are significant at the hub port which is located at a junction point connecting the East-West trade lane and the North-South trade lane; Singapore (or Tanjung Pelepas, Port Klang), Salalah, Algeciras etc., while mainline-to-feeder transshipments are dominant at a junction of the regional waters; Cai Mep, Colombo, Port Said, Piraeus, Rotterdam etc.

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Source：Study Team

Figure 4.11 East-West Trade Lanes and Major Hub Ports

(2) Maritime Network around Cambodia

The maritime network around Cambodia is depicted in Figure 4.10 below. The thicker lines represent the mainline with more container movements. The busiest mainline from East Asia to Europe is drawn with the thickest line (so called “the trunk line”). Cai Mep Port and Ho Chi Minh Port are both located close to the trunk line, while Laem Chabang and Bangkok are rather remote. Sihanoukville has a better position than Laem Chabang but still has a substantial distance to the trunk line.

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Source：Study Team

Figure 4.12 Maritime Network around Cambodia

1） Hub Ports around Cambodia

The important hub ports closely related to Cambodia are Singapore, Tanjung Pelepas, Port Klang and Cai Mep. Located at the border between the Pacific Ocean and the Indian Ocean, Singapore is the hub port where containers are transshipped between different mainlines, for example, from Intra-Asia mainline to Asia/Europe mainline, /Asia mainline to Asia/US West Coast mainline, or Intra-Asia mainline to Asia-Oceania mainline. While Tanjung Pelepas and Port Klang have the same functions as Singapore’s, the users of those two hubs are rather limited; Tanjung Pelepas is mostly used by Maersk Line and Port Klang is the hub of CMA CGM.

Cai Mep is another important hub port in the Indochina region, as it is functioning to gather feeder flows from Indochinese countries in a bundle and channel them onto the mainlines bound for the Far East, North America, etc.

Ho Chi Minh Port may also be a hub port as it has much freer choice for Intra-Asia

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services than Sihanoukville Port does. It should be noted that a shipping line doesn’t fulfill its ocean carriage service by itself but also can use the alliance partners’ services through the “slot charter” arrangements.

2） Inland-Port Connections around Cambodia

Figure 4.11 below simply illustrates the transportation modes for seaborne containers connecting the inland cargo sources/ICDs with the major sea ports around Cambodia. From the viewpoints of importers and exporters in Cambodia, Sihanoukville Port and Phnom Penh Port may be the immediate gateway ports. However, the hub ports such as Singapore, Tanjung Pelepas, Port Klang, Cai Mep and Ho Chi Minh are playing an indispensable role to transfer the containers to the mainlines bound for particular destinations.

for Far East, Cambodia North America truck Importers, Ho Chi (very few traffic Exporters Minh at present) truck truck truck Phnom barge Laem Penh Chabang Dry barge Ports Cai Mep truck rail Intra‐Asia Intra‐Asia Sihano mainlines mainlines ukville

East‐West Intra‐Asia trunk line mainlines Singapore, For South Asia, Middle East, Tanjung Africa, Europe Pelepas, Port Klang

Source：Study Team

Figure 4.13 Connections between Inland and Maritime Networks

3） Deployment of Container Ships to the Major Seaports around Cambodia

The bar graph in Figure 4.12 indicates the yearly TEU capacities of container ships

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deployed to call at the four major seaports closely related to Cambodia. The port with the taller bar represents that it is attracting the larger container ships and more frequent callings. The bar is broken down by color according to the mainline that the container ships are deployed to.

Source：MDS Transmodal “MDS Containership Database” as of August 2015

Figure 4.14 Yearly Container Capacities of Ships Deployed (by Trade Lane /Calling Port)

The prominent characteristics of each port are observed as follows:

･ As for the Europe/Mediterranean mainline and North America mainline, the largest TEU capacities are available at Cai Mep Port, while there is little capacity for Intra-Asia.

･ Laem Chabang Port has the largest TEU capacity in total, but it doesn’t have much capacity for Europe/Mediterranean or for East Coast North America as Cai Mep.

･ Ho Chi Min Port has the second largest TEU capacity in total, but the majority is for Intra-Asia.

･ The smallest TEU capacity is available at Sihanoukville Port and the majority is for Intra-Asia.

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It is presumed in the above that because Laem Chabang Port is set back and remote from the Asia/Europe trunk line, most of the containers bound for Europe/Mediterranean are primarily carried by Intra-Asia mainlines or feeders to Singapore (or Tanjung Pelapas, Port Klang), then transshipped to Asia/Europe mainlines. As for the above, Intra-Asia mainlines are dominant at Ho Chi Minh Port due to its relatively shallow depth. The smallest capacity at Sihanoukville Port in above is due to the small scale of industry in its hinterland.

(3) Shipping Lines’ Services in Cambodia

1） Sihanoukville Port

The shipping lines’ services currently calling at Sihanoukville Port are shown in Table 4.16 below. Currently 10 weekly liner services are available at Sihanoukville Port. All those services are on the Intra-Asia trade lanes except for CMA CGM’s Bangladesh Feeder stretching to Chittagong Port.

Table 4.17 Shipping Lines’ Services Calling at Sihanoukville Port

Average Maximum Yearly Service Slot Yearly Ships Trade Lane Ship Operator Ship Size Ship Size Capacity Name Charterer Calls Deployed (TEU) (TEU) (TEU) South SE Asia Bang CMA CGM 52 3 1,118 1,118 58,136 Asia /South Asia Feeder SE Asia /F IA5 MCC Transport Gold Star 52 8 1,115 1,147 57,961 East/Russia IA9 MCC Transport 52 4 1,678 1,740 87,256

VTX1 SITC Cosco/Hasco 52 5 1,724 1,800 89,648 SE Asia CPX3 SITC 52 3 1,059 1,118 55,085 Intra‐ /Far East Asia RBC2 COSCO/RCL CNC Line 52 3 1,169 1,338 60,771 RSK RCL HeungA/NYK 52 3 628 628 32,656

TR1 MCC Transport 52 3 1,112 1,118 57,824 SE Asia RSZ RCL OOCL 52 1 880 880 45,760 Regional CSX Advance Cont Evergreeen 52 1 910 910 47,320 Total 10 services 520 34 1,215 1,800 592,417 Source: MDS Transmodal “MDS Container Ship Database” as of August 2015

2） Phnom Penh Port

The container ships calling at Phnom Penh Port are all self-propelled container

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barges with 128 TEU or less capacity. Three barge operators; Vietnamese companies Newport Cypress and Gemadept, and the Cambodian Sovereign Base Logistics currently deploy sixteen barges. Their services are almost the same; each barge has a 7-day turnaround with the same route through Mekong River waterways and port rotation as Phnom Penh-Cai Mep-Ho Chi Minh-Phnom Penh. Their services have been used since 2009 by the major ocean container lines as a feeder from Phnom Penh Port to Cai Mep and Ho Chi Minh Port.

The majority of the barges are sailing Phnom Penh Port on Friday, Saturday or Sunday early morning to meet the cargo readiness of the garment factories who usually load the products into containers from Thursday to Saturday, based on the weekly-orders from the overseas buyers.

Table 4.18 Shipping Lines’ Services Calling at Phnom Penh Port

Maximu Barges Average Yearly Barge Slot Yearly m Ship Trade Lane Deplo Ship Size Capacity Name of Barge Operator Charterer Calls Size yed (TEU) (TEU) (TEU) 15‐17 Newport Cypress01, Newport Cypress02, Newport Phnom shipping 364 7 113 128 41,132 Newport Cypress04,Cai Mep16, Tay Penh Cypress Mekong lines Nam10, Tay Nam15, Song Xanh18 /Cai 15‐17 Gemadept09, Phuoc Long18, Puoc River Mep Gemadept shipping 312 6 79 112 24,648 Long20, Puoc Long24, Puoc Long28, Puoc Water /Ho Chi lines Long32 way Sovereign 15‐17 Minh Golden Fortune1, GoldenFortune2, Base shipping 156 3 104 120 16,224 Feeder Golden Fortune8 Logistics lines Total 832 16 128 128 82,004 Source：Study Team

Source：OCDI

Figure 4.15 A Container Barge Navigating on the Mekong River Waterway

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Final Report (4) Selection of Gateway Ports by the Shipping Lines and Cargo Owners

1） CY as the Place of Receipt/Delivery

The service scope of a shipping line can be defined as starting from the “place of receipt” and accomplished at the “place of delivery”. The shipping line bears the responsibility to carry the cargo from the place of receipt to the place of delivery at its own cost. The shipping line’s liability is bound by the bill of lading (B/L) on which both of the places of receipt/delivery are to be described. The ocean freight paid by the cargo owner shall cover all the transportation costs borne by the shipping line.

Generally, the place of receipt/delivery is not necessarily a loading/discharging port, but can be an inland point once it is assigned by the shipping line as an “Inland CY”, provided a reliable/economical operation is ensured there. There are many examples of Inland CYs located inland of Europe, North America and . In Thailand also, Lat Krabang ICD is functioning as the Inland CY of Laem Chabang Port and is well supported by the remote manufacturers in the northern suburbs of Bangkok.

In Cambodia however, only Sihanoukville Port and Phnom Penh Port are currently registered as the CYs, while the private-run dry ports around Phnom Penh (such as So Nguon, Teng Lay, Bok Seng etc.) are not qualified as CYs, nor are the dry ports near the borders (i.e. Poi Pet, Bavet) either.

Major reasons for the above are presumed as follows:

･ Difficulty for shipping lines to manage the road transportation between those dry ports and Sihanoukville/Phnom Penh Port due to the truck ban within Phnom Penh metropolitan area in the daytime

･ Difficulty of transporting the large volume of containers with certainty due to the uncertainty of truck availability in the peak times

･ Expensive truck charges which cannot be compensated with the market ocean freight rates

In order to remove the constraints above, the efficiency/reliability of the road transportation needs to be improved, otherwise a more efficient/reliable transportation mode such as railways needs to be developed.

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2） Criteria for the Selection of Gateway Ports

The major criteria for the port selection by a shipping line may include the following factors:

･ Access to the mainlines or the trunk line

･ Calling ports on the services (by its own or by the alliance partners) available at the gateway port and the hub ports enroots

･ Total transportation cost from the place of receipt to the place of delivery

･ Total transit time from the place of receipt to the place of delivery

As for and above, the geographical situations of Sihanoukville and Phnom Penh Ports need to be taken into account. Since both of them are feeder ports set back remotely from the trunk line, a shipping line tends to choose the most convenient access route to the trunk line depending on the final destination of the cargo; Sihanoukville Port has better access to the mainlines bound for South Asia, Middle East, Africa, Mediterranean, Europe and Oceania through Singapore (or Tanjung Pelepas, Port Klang), while PhomPenh Port is convenient to reach the Far East and North America trade lanes through Cai Mep and Ho Chi Minh Port.

As a part of the above, it seems apparent for the shipping lines to be choosing the gateway ports. However, it should be noted that the cargo owners (i.e. the importers and exporters) have the ultimate decision power on the selection of gateway ports, since the costs for transportation once paid by the shipping line are eventually reimbursed to the cargo owner who is the final bearer of the transportation costs to the gateway port. The cargo owners have immediate interest in the prices of their export products; they usually set the export prices so that they can compensate the transportation costs.

As a part of ④ , the transit time to the gateway port is another concern for the cargo owners especially of the garment industry, since their products have a short market life, which drives them to bring their products into the market as quickly as possible.

The extent/range of cargo owner’s interest in the transportation cost and time is subject to the trade term, which is applied to the export/import goods. If the exporter in the origin country chooses a FOB term with the importer in the destination

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country, the exporter’s interest in the transportation cost will be just from his factory to the port of loading only, while in case of a CIF term, he will care about the total transportation cost including ocean freight up to the port of discharge. The situation will be the same on the transit time, too.

3） Origin/Destination Shares at Sihanoukville and Phnom Penh Ports

The day-to-day behaviors of shipping lines and cargo owners in Cambodia to select the gateway ports may be reflected in the actual handling volume shares between those ports; the origin/destination-wise are shared between Sihanoukville Port and Phnom Penh Port. Actually it is not an easy task to identify the origins/destinations of seaborne containers imported/exported to/from Sihanoukville Port and Phnom penh Port. JICA’s previous study “The Project for the Study on Strengthening Competitiveness and Development of Sihanoukville Port” gives the component shares of the origins/destinations of the seaborne containers handled at two gateway ports in Cambodia; Sihanoukville Port and Phnom Penh Port respectively. The percentages given by that study are shown in the Table 4.18 below.

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Table 4.19 Region-Wise Volume Shares of the Seaborne Containers in Sihanoukville Port and Phnom Penh Port

Sihanoukville Port Imports Exports Origin Region Share Destination Region Share Southeast Asia 45.0% Europe 44.0% East Asia 43.4% Americas 34.7% Middle East/South Asia 4.7% East Asia 12.0% Americas 3.5% Southeast Asia 4.8% Europe 3.0% Middle East/South Asia 2.4% Oceania 0.4% Oceania 1.4% Africa 0.0% Africa 0.7% Total 100.0% Total 100.0%

Phnom Penh Port Imports Exports Origin Region Share Destination Region Share East Asia 69.2% Americas 63.3% Southeast Asia 24.0% East Asia 32.7% Europe 4.9% Southeast Asia 2.2% Americas 1.3% Europe 1.8% Oceania 0.5% Middle East/South Asia 0.0% Africa 0.1% Oceania 0.0% Middle East/South Asia 0.0% Africa 0.0% Total 100.0% Total 100.0% Source ： “The Project for the Study on Strengthening Competitiveness and Development of Sihanoukville Port”, July 2012

As for the exports, the difference between the two gateway ports is revealed in the Table above; Europe has the largest share of the destinations from Sihanoukville Port, while the Americas (virtually all North America) are the major destinations from Phnom Penh Port.

“The Project for the Study on Strengthening Competitiveness and Development of Sihanoukville Port” also made an attempt to calculate origin/destination region-wise shares between Sihanoukville Port and Phnom Penh Port by applying the actual handling volume of each port. Figure 4.14 indicates the region-wise shares between the two ports based on the actual handling volume for the year 2014 given in the previous chapter.

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Imports

ME/S Asia 7,174 0

Americas 5,342 512

SE Asia 68,688 9,459

Oceania 611 197

E Asia 66,246 27,273

Europe 4,579 1,931

Africa 0 39

0% 20% 40% 60% 80% 100%

Sihanoukville Phnom Penh

Exports

ME/S Asia 2,474 0

Oceania 1,443 0

Africa 722 0

Europe 45,353 1,062

SE Asia 4,948 1,298

Americas 35,767 37,349

E Asia 12,369 19,294

0% 20% 40% 60% 80% 100%

Sihanoukville Phnom Penh

Source：Study Team (based on the percentage data provided by “The Project for the Study on Strengthening Competitiveness and Development of Sihanoukville Port”, July 2012)

Figure 4.16 Region-Wise Volume Shares between Sihanoukville and Phnom penh Port (2014)

(5) Selection of Hub Ports

A hub port is selected by the shipping line in consideration of the availability of mainlines, the total transportation cost for the feeder and mainline operations (the shipping lines call it “network cost”) and total transit time; virtually the same criteria as stated in (4)-2). This means that when an immediate gateway port is determined for the container bound for any particular destination, the hub ports enroute should be determined at the same time. A hub port may sometimes be determined even when the cargo owner selects a shipping line, as every shipping line

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usually offers an optimum route within its own maritime network to minimize the cost and transit time.

(6) Volume of Seaborne Containers

In this section, the Study Team estimates the volume of import/export containers by origin/destination region by applying the component percentages indicated in JICA’s previous study “The Project for the Study on Strengthening Competitiveness and Development of Sihanoukville Port”.

Figure 4.15 indicates the estimated volumes of containers by origin/destination region for Sihanoukville Port and Phnom Penh Port respectively. The calculation is made multiplying the total laden throughput each port by the percentages given in Table 4.18.

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Sihanoukville Port (2014) Import TEUs by Origin Export TEUs by America Europe, Oceania, SE Asia, ME/S Oceania, s, 5,342 4,579 611 4,948 Asia, 1,443 Africa, 0 2,474 ME/S Africa, Asia, E Asia, 722 7,174 12,369

SE Asia, Europe, 68,688 45,353

E Asia, America 66,246 s, 35,767

Phnom Penh Port (2014) Import TEUs by Export TEUs by Destination

Europe, ME/S Oceania, 1,062 Asia, 0 0 America Oceania, Africa, s, 512 197 39 SE Asia, Africa, 0 ME/S 1,298 Europe, Asia, 0 1,931 E Asia, SE Asia, 19,294 9,459 America s, E Asia, 37,349 27,273

Source：“The Project for the Study on Strengthening Competitiveness and Development of Sihanoukville Port”, July 2012

Figure 4.17 Estimated Seaborne Container Volume (in TEUs) to/from Cambodian Ports

(7) Transit Time

Table 4.19 shows the transit times between Indochinese ports (including inland CYs) and the major world ports (Los Angeles, Tokyo, Shanghai and Rotterdam) taking examples from Maersk Line and MCC Transport.

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Table 4.20 Transit Times to/from Major Indochinese Ports and Inland CYs

Export (days) To ↓ From → Bangkok Lat Krabang Laem Chabang Phnom Penh Sihanoukville Ho Chi MinhCai Mep

via Laem Chabang, via Laem Chabang, via barge to Cai via Tanjung via barge to Cai Los Angeles, via Singapore via Chiwan Singapore Singapore Mep, Chiwan Pelepas Mep, Chiwan Long Beach 30 30 29 24 29 22 21 receiving at Lat via Tanjung via barge to Ho Krabang CY, via via Laem Chabang direct Pelepas, Hong via Cai Mep direct Chi Minh Tokyo Laem Chabang Kong 998162476 receiving at Lat via barge to Ho Krabang CY, via via Laem Chabang direct direct direct via Ho Chi Minh Shanghai Chi Minh Laem Chabang 77612767 receiving at Lat via barge to Ho receiving at Ho Chi Krabang CY, via via Laem Chabang, via Tanjung via Tanjung via Tanjung Chi Minh, Tanjung Minh CY, Tanjung Rotterdam Laem Chabang, Tanjung Pelepas Pelepas Pelepas Pelepas Pelepas Pelepas Tanjung Pelepas 27 27 26 30 29 26 26

Import (days) From ↓ To → Bangkok Lat Krabang Laem Chabang Phnom Penh Sihanoukville Ho Chi MinhCai Mep via Tanjung via Tanjung Pelepas, Laem via Tanjung via Singapore, Ho via Tanjung Los Angeles, Pelepas, Laem via Singapore via Singapore Chabang, delivery Pelepas Chi Minh, barge Pelepas Chabang Long Beach at Lat Krabang CY 41 41 39 46 36 39 37

via Ho Chi Minh, direct via Laem Chabang direct via Hong Kong direct via Ho Chi Minh Tokyo barge

12 12 10 16 18 8 10

via Laem Chabang, via Ho Chi Minh, delivery at Lat via Laem Chabang direct via Hong Kong direct via Ho Chi Minh barge Shanghai Krabang CY 11 11 10 11 8 6 8 via Singapore, via Tanjung Laem Chabang, via Singapore, via Tanjung via Singapore Pelepas, Ho Chi via Singapore via Singapore delivery at Lat Laem Chabang Pelepas Rotterdam Minh, barge Krabang CY 27 27 25 43 25 26 26 Source：Maersk Line, MCC Transport

Figure 4.16 shows a comparison of transit times by origin/destination based on the Table above. As for the export, an advantage is observed with Ho Chi Minh and Cai Mep, which are both located close to the trunk line. Phnom Penh and Sihanoukville have longer transit times with Tokyo, Shanhai and Rotterdam than the Thai/Vietnamese ports. As for the import, Phnom Penh has longer transit times with all origins.

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Final Report Export (days) 35

30

25 Bangkok Lat Krabang 20 Laem Chabang 15 Phnom Penh Sihanoukville 10 Ho Chi Minh

5 Cai Mep

0 Los Angeles, Long Tokyo Shanghai Rotterdam Beach

Import

(days) 50 45 40 35 Bangkok 30 Lat Krabang Laem Chabang 25 Phnom Penh 20 Sihanoukville 15 Ho Chi Minh 10 Cai Mep 5 0 Los Angeles, Long Tokyo Shanghai Rotterdam Beach

Source: Maersk Line, MCC Transport.

Figure 4.18 Comparison of Transit Times by Origin/Destination

(8) Transportation Cost

Table 4.20 shows the prevailing ocean freight rates between Indochinese ports (including inland CYs) and the world major ports (Los Angeles, Tokyo, Shanghai and Rotterdam) as of February 2016.

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Table 4.21 Prevailing Ocean Freight Rates to/from Major Indochinese Ports

Export (Base rate + BAF/CAF) (USD) Lat Laem Phnom Sihanouk Ho Chi To ↓ From→ Bangkok Cai Mep Krabang Chabang Penh ville Minh 20' 1,260 1,260 1,170 1,200 1,200 1,575 1,485 Los Angeles 40' 1,400 1,400 1,300 1,500 1,500 1,750 1,650 20' 300 350 300 300 400 100 100 Tokyo 40' 600 700 600 600 800 200 200 20' 200 250 200 180 250 400 400 Shanghai 40' 300 400 300 500 500 600 600 20' 600 600 600 600 600 600 600 Rotterdam 40' 1,200 1,200 1,200 1,200 1,200 1,200 1,200

Import (Base rate + BAF/CAF) (USD) Lat Laem Phnom Sihanouk Ho Chi From ↓ To→ Bangkok Cai Mep Krabang Chabang Penh ville Minh 20' 720 720 720 600 600 720 720 Los Angeles 40' 800 800 800 1,000 1,000 800 800 20' 150 150 150 300 300 200 200 Tokyo 40' 300 300 300 450 450 400 400 20' 250 300 250 350 350 200 200 Shanghai 40' 400 500 400 700 700 400 400 20' 500 500 500 500 500 500 500 Rotterdam 40' 700 700 700 700 700 700 700 Source：Study Team

Table 4.21 shows the rates of Terminal Handling Charges (“THC” in short) by port/CY. The THC rates are offered by the shipping lines to recover the stevedore charges (for ship loading/unloading and yard lifting for empty containers) payable to the terminal operator. The rates may vary by shipping line.

Table 4.22 Prevailing Terminal Handling Charges at Major Indochinese Ports

(USD) Lat Laem Phnom Sihanouk Ho Chi Bangkok Cai Mep Krabang Chabang Penh ville Minh 20'8080801201208383 THC 40' 120 120 120 160 160 135 135 Source：Study Team

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Table 4.23 Base Freight of Maritime Transportation (Jan.2016)

Table 1 PNH to USW PNH to USE PNH to EU

20F 1576 2376 850

40F 1970 2970 1700

45F 2495 3762 2125

Travel Days 24 28-32 23-26

Suez or Panama Panama Suez

Table 2 SHV to USW SHV to USE PNH to EU

20F 1576 2376 750

40F 1970 2970 1500

45F 2495 3762 1875

Travel Days 28 28-32 23-26

Suez or Panama Panama Suez

Table 3 Cai Mep to USW Cai Mep to USE Cai Mep to EU

20F 1120 1920 600

40F 1400 2400 1200

45F 1773 3040 1500

Travel Days 22 26-30 21-24

Suez or Panama Panama Suez

Source; JICA Study Team

4.4.4 Container Transport through the Mekong River

(1) Trial Voyage in the Mekong

The following passage is a citation from the report of the Ministry of Land, Infrastructure, Transport and Tourism in Japan. (MLIT)

1） Outline of Trial Voyage

This trial voyage was planned to identify obstacles and issues to realize smooth barge navigation on the Mekong River. The survey team focused on the issues of infrastructure, operation and documentation regarding the river transportation and

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Final Report proposes countermeasures to facilitate the river transportation between the two countries. The survey including interviews was implemented from 13th to 21st January 2015 in Cambodia and Vietnam; as part of the survey, an onboard trial voyage was also carried out from 18th to 20th January. This trial voyage was carried out at the initiative of the Ministry of Public Works and Transport in Cambodia (MPWT) and the Ministry of Transport in Vietnam (MOT) with the support of the Ministry of Land, Infrastructure, Transport and Tourism in Japan (MLIT) and Japan International Cooperation Agency (JICA).

Table 4.24 Trail Cases of Voyage

PNH Border Cai Mep Route Case-1 0:50 on 18th 5:20 -7:35 14:25 on 19th 37h35m, 355km Sovereign on 18th Sea 96 TEUs Case-2 12:30 on 18th 19:00- 20:30 5:20 on 20th 40h50m, 374km Gemadept on 18th Canal 112 TEUS CMIT Case-2 0:200 on 18th 8:00 -10:00 18:15 on 19th 38h15m ,371km Cypress on 18th Canal through 128 TES SG New Port TCIT Source: MLIT

Source: MLIT

Figure 4.19 Trial voyage Route

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2） Case -1; Border Pass in the Morning, South China Sea Route

The Golden Fortune 1 of Sovereign cannot pass the Cho Gao Canal and must pass the river mouth of the Mekong instead. However, the river mouth is very shallow (around 2.0 m at low tide) and has many obstacles such as fishing nets. Therefore, they have to wait for eleven hours for the high tide and reduce navigation speed because of the many fishing nets there.

Source: MLIT

Figure 4.20 Trial voyage Route of Sovereign Barge

The barge waited for two hours at the border for the cross border procedures and for eleven hours at My Tho for the high tide in the mouth of the Mekong. Total distance and time of voyage were 344 km and 37.35 hours. The average vessel speed was 14km/h excluding waiting times (13hr).

Table 4.25 Time table of Sevigne Barge

Check Point Distance Time Hours

Departure from Phnom Penh Port 0 km At 0:50 AM 18 Jan. Sunday 0:00

Arrival at border 72 km At 5:30 AM 18 Jan. Sunday 4:40

Departure from the border At 7:35 AM 18 Jan Sunday 6:45

Arrival at My Tho 216 km At 19:15 PM 18 Jan Sunday 18:25

Departure from My Tho At 6:30 AM 19 Jan Sunday 29:40

Arrival at Cai Mep Port（TCIT） 344 km At 14:25 PM 19 Jan. Monday 37:35

Source; MLIT

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3） Case -2 Border Pass in the Night, Cho Gao Route

The barge of Gemadept Co. Ltd passes the Cho Gao Canal. It is necessary to wait for the low tide and adjust its ballast water to keep its draft low.

Source: MLIT

Figure 4.21 Trial voyage Route of Sovereign Barge

The barge waited for 1.5 hours at the border for the border procedures. Total distance and time of voyage were 374 km and 40:50 hours. The average vessel speed was 9.6 km/h excluding waiting times at the border.

Table 4.26 Time Table of Gemadept Barge

Check Point Distance Time Hours

Departure from Phnom Penh Port 0 km At 12:30 PM 18 Jan. Sunday 0

Arrival at border 72 km At 19:00 PM 18 Jan Sunday 6:30

Departure from the border 72 km At 20:30 PM 18 Jan. Sunday 8:00

Arrival at Cho Gao Canal 255 km At 15:40 PM 19 Jan Sunday 27:10

Arrive at Soi Rap River 306 km At 22:05 PM 19 Jan Sunday 31:40

Arrival at Cai Mep Port（CMIT） 374 km At 5:20 PM 20 Jan. Monday 40:50

Source: MLIT

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Figure 4.22 Electric Cable above Cho Gao Figure 4.23 Under Clearance of Cho Gao Canal (Source; MLIT) Bridge (Source MLIT)

4） Case-3; Border Pass in the Morning, Cho Gao Route

The barge of New Port Cypress Co. Ltd passes the Cho Gao Canal. The actual draft of the barge should be around 2.2 m and care must be taken regarding the restrictions of the height of bridges in the canal. This is the trial case of night border clearance. The vessel left from Phnom Penh New Port at 12:30 on the 18th of January and arrived at the Cambodian border at 19:00 on the same day.

Cho Gao Canal Long Tau River

Source; MLIT

Figure 4.24 Navigation Route of Cypress Barge

Table 4.27 Time Table of Cypress Barge

Check Point Distance Time Hours

Departure from Phnom Penh Port 0 km At 2:00 AM 18 Jan. Sunday 0

Arrival at border 72 km At 8:00 AM 18 Jan. Sunday 6:00

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Check Point Distance Time Hours

Departure from the border At 10:00 AM 18 Jan Sunday 8:00

Arrival at SPCT 325 km At 11:10 AM 19 Jan Sunday 33:10

Departure from SPCT At 13:10 PM 19 Jan Sunday 35:10

Arrival at Cai Mep Port（CMIT） 371 km At 18:15 PM 19 Jan. Monday 40:15

This barge waited for two hours at the border for the border procedures and for two hours at the SPCT for the container discharge. Total distance and time of voyage were 371 km and 40:15 hours. The average vessel speed was 10.3 km/h except for waiting times.

5） Protocols for Exportation through River Transportation

A: Each officer from MOC and GDCE comes to the factory and they inspect the cargo inside the container. After their inspection, the container doors are closed and sealed. There are two seals, one is for GDCE and other is for the shipping company.

B: Original document is transferred to the headquarters of GDCE and confirms valuation.

C: Container is transported inside Phnom Penh New Port and an officer from GDCE confirms the seal and takes it to confirm the transportation of the container.

D: After a valuation is finished, the original document was transferred to the port. The ship clearance committee is held before the barge departure joined by all relevant officers.

F: Barge arrived at the border, all officers check the documents again and a barge can pass through the Cambodia-Vietnam border.

Five officer checks are required for container transship to a Vietnamese port.

At the border, there is an integrated cross border office in Vietnam but in Cambodia, the service company should go around to each of the authorities offices. One stop service is not provided on the Cambodia side. The documents required to cross the border in Cambodia is much more than that of Vietnam.

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Table 4.28 Document Required to Cross Mekong Border

Cambodia Side Vietnam Side Customs Invoice. General Declaration Packing List Crew’s effects Declaration Joint Inspection Report. ASYCUDA Ship’s Store Declaration Customs Declaration Cargo Declaration Passenger List Dangerous Good Manifest Bill of Lading Passenger List Cargo Manifest Crew List Crew’s Personal Effects Provision Store List Bonded Store List Ship’s Store List Deck Store, Engine Store List Declaration of Departure Quarantine Declaration of ship Arrival Health Questions Quarantine certificate for Arr -Dep Model of Maritime Declaration of Health Declaration of Health for Out Bound Report of Water Taken on Board Crew List Maritime Declaration of Health Port Port Clearance (Viet Nam) Port Clearance (Viet Nam) Service Port Clearance (Cambodia) Port Clearance (Cambodia) Declaration of ship Arrival Declaration of ship Arrival Declaration of Departure Declaration of Departure Crew List Crew List Discharging List Discharging List Loading List Loading List Certificate of ship( Port Due &Charge) Certificate of ship ( Port Due & Charge) Police Declaration of ship Arrival Declaration of ship Arrival Immigration Discharging List Discharging List Container Loading List Container Loading List Declaration of Departure Declaration of Departure Crew List Crew List

Figure 4.25 Documents Required to Pass Cambodia Border

(2) Water Transportation Fee

The barge transportation fee includes the maritime transportation fee. The result of

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the evaluation of river transportation is shown in the table below. Maritime freight is determined by volume of cargo demand, not by transport distance.

Table 4.29 River transportation Cost

20F 40F

PNH-Cai Mep USD 200 -350 USD 300-450

4.4.5 National Road

(1) Cross border transport

Scheduled service is unpractical as it is in ocean transport. Spot basis service based on FCL is commonly chosen by custom demands. Unlike LCL service, it can not provide delivery on the specified day of the week. Promoting a double license system has been enlarged, however the Thailand route is still inactive so that the Study Team cannot find the practical Case I this study. The number of double license is so little that the Study Team cannot find the operation of a double license truck being practical. Regarding the Vietnamese route, a World Bank survey (2014) showed the details of double truck license holders in table4.29: 57 trucks were registered and 43 were owned by two CAMTA members.

Table 4.30 Cambodia companies with international cargo transportation permits to Vietnam

Source: WB, “Cambodian trade corridor performance assessment”, 2014.

In this context, transshipment operation is the standard method for cordial transpiration. In Poipet, some transship operators have facilities for

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transshipment operations before the current dry ports started to operate. The major companies are Diamond Transport, Pacific Transport and TranHo. Other big importers have their own transshipment facilities for their operation. Users are free to choose what operator is suitable for demand and cost.

In Babvtet, officially So Nguon dry port plays the dominant status for transshipment, and a majority of users are likely to use it.

Cambodian forwarders can provide border transportation with using such transship operators and trucks as well as customs agents under the forwarder.

(2) Cargo Volume of Dry Port

Cambodia exported 20,435 containers and imported 32,324 in 2015. Ordinal export goods are little and most of them are QIP or some individual cargo. The number of imported containers is shown the table below.

Table 4.31 Number of Import Containers of Dry Port (2015)

Number of Container Total Taxation Exemption (QIP)

1．So Nguon Dry Port 1,089 640 449 2. Tech Srun Dry Port 7,163 969 6,194 3. Teng Lay Dry Port. 10,275 5,336 4,939 4. Olair World Wide Dry Port 3,085 571 2,514 5. Bok Seng Dry Port 3 3 0 6. Union Dry Port 3,129 1,857 1,272 7. Sokan Transport Dry Port 1,579 999 580 8. Hong Leng Huor Dry Port 5,606 3,938 1,668 9. TOLL Dry Port 395 249 146 10. Try Pheap Dry Port 0 0 0

Total 32,324 14,562 17,762

Source: GDCE.

These import containers were from Bavet (58.4%), Sihanoukville (41.5%) and Poipet (0.1%).71.3% of those containers were handled by the top three companies, Teng Lay Dry Port, Tech Srun Dry Port and Hong Leng Huor Dry Port.

The op three companies, Teng Lay Dry Port, Hong Leng Huor Dry Port and Union Dry Port, handled 76.4% of the taxation containers. The top three companies, Tech

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Srun Dry Port, Teng Lay Dry Port and Olair World Wide Dry Port, covered 76.8% of the tax exemption containers including QIP.

Moreover, the amount of taxes in 2015 were paid by the top three companies, Teng Lay Dry Port, Union Dry Port and Hong Leng Huor Dry Port. The amount of taxes of Teng Lay Dry Port is mostly for import cars.

According to the interview results available so far, most of the trucks run empty when bound to or from Thailand, while some trucks bound for Vietnam pick up cargo near the border on their return journey in order to avoid running empty all the way. 20-feet and 40-feet container’s charges are almost the same in land transport. This reason is because of running empty on the return journey and undeveloped cargo consolidation.

(Grasp of domestic cargo flow by simple OD Survey)

The OD survey of container trailers entering/leaving the five major dry ports (Bok Seng Dry Port, Sokan Okan Dry Port, Tec Srun Dry Port, Union Dry Port, and So Nguon Dry Port) was conducted by using the truck B/Ls which indicate the trailers’ point of departure, destination, type of cargo, weight, etc. Truck B/Ls were used because all truck drivers entering dry ports have a truck B/L. The survey covered a total of 501 trailers by dry port.

According to the interviews, weekly cargo movement increases as the weekend approaches. This is probably because cargo leaves neighboring countries on Monday, Tuesday, etc., and arrives in Phnom Penh on or close to the weekend.

Table 4.32 Number of Interviews at Dry Ports

Unit: number of trailers 1.BOK SENG DRYPORT 12-Jan-16 (Tue) 13-Jan-16 (Wed) 14-Jan-16 (Thu) Total Inbound 15 15 15 45 Outbound 16 15 15 46 2.SOKAN DRYPORT 11-Jan-16 (Mon) 13-Jan-16 (Wed) 15-Jan-16 (Fri) Inbound 12 26 15 53 Outbound 15 20 23 58 3.TEC SRUN DRYPORT 11-Jan-16 (Mon) 12-Jan-16 (Tue) 13-Jan-16 (Wed) Inbound 14 13 23 50 Outbound 18 20 17 55 4.UNION DRYPORT 11-Jan-16 (Mon) 12-Jan-16 (Tue) Inbound 31 26 57

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Final Report Outbound 23 20 43 5.SO NGUON DRYPORT 19-Jan-16 Inbound 63 63 Outbound 31 31 Total 238 155 108 501 Subtotal (Inbound) 135 80 53 268 Subtotal (Outbound) 103 75 55 233 Source: JICA Study Team.

The result of OD survey is as the table below.

Table 4.33 The Result of OD survey

Destination component Origin Phnom Sihaknouk Kompong Kampong Svay Siem Battam Koh Total Kandal Poipet Bavet Ta Keo rate Penh ville Speu Chhnang Reing Reap bang Kong

Phnom Penh 3,089 5,284 184 272 306 173 27 9,335 56.7%

Sihaknouk 3,136 797 244 104 84 94 60 70 4,589 27.9% ville

Svay Reing 1,018 205 27 1,250 7.6%

Bavet 516 33 169 718 4.4%

Kompong 223 223 1.4% Speu

Ta Keo 15 95 110 0.7%

Kandal 25 51 23 99 0.6%

Kampong 24 47 71 0.4% Chhnang

Kompot 48 48 0.3%

Poi Pet 28 28 0.2%

Total 7,823 6,545 428 376 306 285 238 196 94 83 70 27 16,471 100.0%

component 47.5% 39.7% 2.6% 2.3% 1.9% 1.7% 1.4% 1.2% 0.6% 0.5% 0.4% 0.2% 100.0% rate Source: JICA Study Team.

The result of this survey shows that Phnom Penh and Sihanoukville are the higher ranks and account for 74.7% of the origins and destinations. The same point of origin and destination means movement within this area. The detailed OD of moving the same area is as in the table below.

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Table 4.34 The Result of Detailed OD (Unit: ton)

Destination

Phnom Penh Sihaknouk ville Origin Componen Total PP PP Sub SHV SHV Sub t rate Factory Dryport Total Port Dryport Total

PP 475 909 1,384 4,372 320 4,692 6,076 49.4% Dryport PP 23 181 204 592 592 796 6.5% Phnom Factory Penh PP Port 855 647 1,502 0 0 1,502 12.2%

Sub 1,353 1,737 3,090 4,964 320 5,284 8,373 68.0% Total SHV 718 718 762 762 1,480 12.0% Dryport Sihaknouk SHV 314 2,104 2,418 35 35 2,453 19.9% ville Port Sub 1,032 2,104 3,136 762 35 797 3,933 32.0% Total

Total 2,385 3,841 6,226 5,726 355 6,081 12,306 100.0%

Component rate 19.4% 31.2% 50.6% 46.5% 2.9% 49.4% 100.0%

Source: JICA Study Team.

In the detailed OD, there is much cargo volume transported from Phnom Penh to the Sihanoukville Port and from the Sihanoukville Port to Phnom Penh dry ports. Moreover, at OD in Phnom Penh, there is much cargo volume from dry port to dry port and from Phnom Penh Port to dry ports. At OD in Sihanoukville, there is a large amount of cargo volume from the dry port in Sihanouk ville to Sihanouk ville Port.

Regarding the cargo types in the OD survey, garments covered about 70% (see the table below). In addition, the volume of cargo weight of above table and Table 4.34 differ. This is because there were some two OD by same truck. The same truck transported the same cargo, and the duplication was removed in Table4.34.

Table 4.35 The Result of Detailed OD (Unit: ton)

Description of Goods Gross Weight (ton) Ratio

Garment 8,953 70.1%

Rice 405 3.2%

Metal 361 2.8%

Electric Material 338 2.6%

Beer 313 2.4%

Sugar 247 1.9%

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Description of Goods Gross Weight (ton) Ratio

Shoes 202 1.6%

Confectionary 177 1.4%

Wheat 155 1.2%

Shoes Material 152 1.2%

Machinery 130 1.0%

Rubber 127 1.0%

Furniture 124 1.0%

Others 1,090 8.5%

Total 12,772 100% Source: JICA Study Team.

(3) Truck Flow Volume at Main Border Points and Ports

The feature of overland route transportation is shown by using the passing freight container trucks at four border points, Poipet, Bavet, the Sihanoukville and new Phnom Penh Ports, in the target route. Table 4.35 shows the passage number of the freight container trucks at four border points. The number of imported containers is annually 185,000, and the number of export containers is annually 123,000, and there is a greater number of imported racks than the number of export trucks. As for the percentage according to the border point, in export and import, the truck number of Sihanoukville Port has more than the half in both export and import. Sihanoukville Port occupies 61.5 percent of the export trucks and 55.6% of the import trucks. In Cambodia, about 75% of the import trucks and 90% of the export trucks pass through both ports. Compared with the number of trucks, which passes through these ports, there is a small number of trucks which pass the border point of the southern economy corridor in comparison. Moreover, the export-and-import cargo of the border point of the southern economy corridor has a large imbalance. It can be considered that most of the international land transport trucks are single charge transport.

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Table 4.36 Number of container trucks in the border points

2013 2014 2015

Poipet Import 2,886 5,616 5,271

Export 0 912 998

Bavet Import 32,618 37,309 40,115

Export 9,800 11,947 12,800

PP Port Import 22,803 31,625 36,820

Export 27,921 32,578 33,618

SHV Port Import 79,730 94,420 103,025

Export 57,170 65,679 75,844

Total Import 138,037 168,970 185,231

Export 94,891 111,116 123,260

Source: GDCE

Table 4.37 Imported truck percentage in the border points

2013 2014 2015

Poipet 2.1% 3.3% 2.8%

Bavet 23.6% 22.1% 21.7%

PP Port 16.5% 18.7% 19.9%

SHV Port 57.8% 55.9% 55.6%

Total 100.0% 100.0% 100.0%

Source: GDCE

Table 4.38 Exported truck percentage in the border points

2013 2014 2015

Poipet 0.0% 0.8% 0.8%

Bavet 10.3% 10.8% 10.4%

PP Port 29.4% 29.3% 27.3%

SHV Port 60.2% 59.1% 61.5%

Total 100.0% 100.0% 100.0%

Source: GDCE

Hereinafter, it is stated for each feature by every border point.

1） Poipet

The number of trucks in Poipet on the Thai border is overwhelmingly a large bulk

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compared to the container. About 90 percent of imported trucks are bulked cargo. Container trucks have a large imbalance between export and import. This indicates that many one-way cargo trucks exist.

Table 4.39 Number of trucks in Poipet border

2013 2014 2015

Container Import 2,886 5,616 5,271

Export n.a. 912 998

Bulk Import n.a. 51,505 66,236

Export n.a. n.a. n.a.

Total Import 2,886 57,121 71,507

Export n.a. 912 998

Source: GDCE

2） Bavet

The import trucks (2015), which passes Bavet, consists of 40,000 containerized cargo trucks and 21,000 of bulk freight trucks. There are many containerized cargo trucks as compared with the Poipet case. On the other hand, the number of export trucks (2015) consists of 12,000 of containerized cargo trucks and 2,600 of bulk cargo trucks. Export trucks are many containerized cargo trucks as well as import trucks.

Table 4.40 Number of imported trucks passing Bavet (Unit: Number of truck per year)

Year 2013 2014 2015

Poipet Container trucks 3,916 9,952 12,431

Bulk Trucks 4,194 9,202 14,924

SEZ （Manhattan& Container trucks 6,569 7,440 8,260

Tai Seng） Bulk Trucks 4,152 4,835 5,895

Others Container trucks 22,133 19,917 19,424

Bulk Trucks 237 233 713

Total Container trucks 32,618 37,309 40,115

Bulk Trucks 8,583 14,270 21,532

Source: GDCE

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Table 4.41 Number of export trucks passing Bavet (Unit: Number of truck per year)

Year 2013 2014 2015

Poipet Container trucks 98 226 549

Bulk Trucks 118 232 219

SEZ （Manhattan& Container trucks 9,030 11,379 11,878

Tai Seng） Bulk Trucks 1,529 2,252 2,281

Others Container trucks 672 342 373

Bulk Trucks 296 106 193

Total Container trucks 9,800 11,947 12,800

Bulk Trucks 1,943 2,590 2,693

Source: GDCE

The half number of import trucks, which passes Bavet, consists of Manhattan SEZ and Tai Seng SEZ. The truck that passes Bavet consists of 400,000 of import, and 128,000 of export. The number of imported trucks is about three times that of the export truck number. Trucks in Bavet carry many one-way loaded cargo. This is considered to be factory customs clearance in the Phnom Penh SEZ and factories in Phnom Penh, etc.

Table 4.42 Container truck passing Bavet (Unit: Number of truck per year)

Year 2013 2014 2015

Poipet Import 3,916 9,952 12,431

Export 98 226 549

SEZ （Manhattan& Import 6,569 7,440 8,260

Tai Seng） Export 9,030 11,379 11,878

Others Import 22,133 19,917 19,424

Export 672 342 373

Total Import 32,618 37,309 40,115

Export 9,800 11,947 12,800

Source: GDCE

3） New Phnom Penh port

Table 4.42 shows the number of container truck transition using new Phnom Penh

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Port. The table also shows the place where customs-procedures were performed. The number of containerized cargo trucks using new Phnom Penh Port (2015) consists of 36,000 of import trucks and 33,000 of export trucks per year. As for almost all of the imported containerized cargo, customs procedures are performed at the new Phnom Penh Port. On the other hand, as for 25,000 of the 33,000 of the export trucks, customs procedures are performed except for the new Phnom Penh Port.

Table 4.43 Import container truck number of new Phnom Penh Port

(Unit: Number of truck per year)

2013 2014 2015

PPAP 22,317 31,030 36,242

Others 486 595 578

Total 22,803 31,625 36,820

Source: GDCE

Table 4.44 Export container truck number of new Phnom Penh Port

(Unit: Number of truck per year)

2013 2014 2015

PPAP 5,977 6,938 7,783

Others+ 21,944 25,640 25,835

Total 27,921 32,578 33,618

Source: GDCE

4） Sihanoukville Port

Table 4.44 shows the number of container truck transition using the Sihanoukville Port. The table also shows the place where customs-procedures were performed. The containerized cargo truck (2015) using the Sihanoukville Port consists of 103,000 of the import trucks and 75,000 of the export trucks in a year. Customs procedures of 85,000 (of 103,000) import trucks 85,000 are performed in Sihanoukville Port. On the other hand, export procedures for 54,000 (of 75,000) of export trucks are performed excluding the Sihanoukville Port.

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Table 4.45 Import container truck number of Sihanoukville port

2013 2014 2015

SHV Port 71,582 81,818 85,134

SHV SEZ 1,252 2,400 2,905

Others 6,896 10,202 14,986

Total 79,730 94,420 103,025

Source: GDCE

Table 4.46 Export container truck number of Sihanoukville port

2013 2014 2015

SHV Port 16,743 15,637 20,918

Others 40,427 50,042 54,926

Total 57,170 65,679 75,844

Source: GDCE

(4) Transport Time

The JICA Study Team equipped a trailer with GPS and measured for the average speed on RN 1 and RN 5.

1） RN 1

RN 1 was measured for the average speed between the major cities, from Ho Chi Minh to Phnom Penh. The result of this survey is shown in Table 4.46. The average speed of that is about 30 km/h in Vietnam, even though it takes time because of traffic congestion. The situation is the same in Cambodia; this is because RN 1 in most places has only one lane and poor road conditions. In the future, when the highway along the RN 1 has been developed, it is necessary to avoid the transport congestion from Bavet to Ho Chi Minh City. The trailer trace survey shows that the trucks and trailers were not waiting only at "0 Point”. Therefore, traffic congestion on the border had not occurred.

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Table 4.47 Average Speed between Major Cities on NR 1

Average Maximum Minimum Distance No Departure Place Arrival Place Time Speed Speed Speed (km) (km/h) (km/h) (km/h)

1 HCM Bavet 70.1 2:19 30.2 53.1 0.0

２ Bavet Svay Rieng 41.3 1:51 22.3 58.2 0.0

３ Svay Rieng Tsubasa Bridge 60.9 1:51 32.9 60.5 18.6

４ Tsubasa Bridge Pnom Penh City 49.6 2:10 22.9 56.2 7.9

５ Pnom Penh City Pnom Penh City 37.4 0:55 40.8 51.5 0.0

Total 259.3 9:06 28.5

Source: JICA Study Team.

2） RN 5

RN 5 was measured for the average speed between the major cities from Poi Pet to Phnom Penh. Widening of RN 5 is under construction, the road pavement is not good and trucks run at a low speed. However, excluding this area trucks can usually run at speed.

The result of this survey is shown in Table 4.47. The average speed is about 37 km/h, which is a low speed to run for about 390 km, this is because RN 5 in most places has only one lane and lacks an adequate number of streetlights, and the trucks run at night to avoid the truck ban in Phnom Penh. Even if it were developed into two lanes, there is another problem in that it serves as a community road in many places. If the trucks can run at high speed it will reduce the portal-to-portal time for the truck drivers and also the transport cost.

The maximum speed will be 60 km/h, which is about 1.6 times the average speed. If it can run at this speed, the time required can be shortened from the current nine and a half hours to about six hours.

Table 4.48 Average Speed between Major Cities on NR 5

Average Maximum Minimum Distance No Departure Place Arrival Place Time Speed Speed Speed (km) (km/h) (km/h) (km/h)

1 Poi Pet Sisophon 42.6 0:57 43.9 59.3 0.0

3 Sisophon Battambeng 63.8 1:51 54.0 34.3 16.5

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Average Maximum Minimum Distance No Departure Place Arrival Place Time Speed Speed Speed (km) (km/h) (km/h) (km/h)

4 Battambeng Pursat 111.5 2:29 37.9 52.4 0.0

5 Pursat Kampong Chhnang 94.7 2:03 37.3 51.8 0.0

6 Kampong Chhnang Road improvement 59.5 1:27 39.8 55.1 0.0

7 Road improvement Phom Penh 18.8 0:41 24.4 41.4 0.0

Total 390.9 9:31 37.1 Source: JICA Study Team.

Trucks entering Poipet via the Aranyaprathet wait on the Thailand National Road 33 if they arrive before the border opening time. Therefore, the JICA Study Team measured the distance of the traffic congestion for every hour from 7:00 to 10:00. Trucks cannot come within 1.5 km of the border until 10:00. Traffic congestion starts at the same point.

Table 4.49 Measurement of Traffic Congestion at Aranyaprathet

Starting point of Distance from Number of waiting Time waiting trucks Border trucks 7:00 1.5 km from Border 2.58 km 54 8:00 1.5 km from Border 2.75 km 63 9:00 1.5 km from Border 2.96 km 73 10:00 1.5 km from Border 3.02 km 76 10:30 Border 2.13 km 107

Source: JICA Study Team.

The trucks start moving toward the border at 10:00. When the travel time of twenty trucks was measured, the movement for one truck was about 20m per one minute. Since the length of traffic congestion is about 1.52 km at 10:00, the tail end of the trucks needed 76 minutes to arrive at the border.

According to interviews with Japanese logistics companies, even if the trucks arrive early in the morning, they go through the border after 11:00. If the traffic congestion

is resolved, it will be possible to reduce transport cost.

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Final Report 4.4.6 Actual Condition Survey for Container Transport by Rail to Sihanoukville Port

(1) Framework of Experimental Railway Survey

The survey team observed the container rail transport processes and administrative protocols, interviewed the relevant officials in charge of a warehouse and ICD in PNH and SHV port including custom offices. The Survey Team boarded a regularly scheduled train in order to conduct the train operation survey (Time, Distance, and Speed).

(2) Survey of Rice Exporter

Surveys of rice export procedures targeting the largest rice exporting companies, Amru Rice and Khmer Foods Group, were carried out.

1） Amru Rice

･ Location: 10 km north from the Railway ICD, outside the area of the truck ban

･ Export Volume in 2015: 60,000 tons (2,400 TEUs)

･ Area of Rice Production: Every province but the majority is produced in Batambang Province

･ Export Regions: Europe, China, USA

Table 4.50 Transport Cost of Amru Rice

Truck Rail

Modal Share to SHV 80% 20%

Transport Cost to SHV $180-200 $197

(trailer $75, rail $100, port $22)

Transport Time to SHV 6 hours 0.5 hour to ICD&11 hours to SHV

port

Arrival day and time Saturday morning. Friday morning

Customs Clearance At the port, self-clearance At the port, self-clearance

Source: Study Team

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2） Khmer Foods Group

･ Location: 2 km from Monivong Bridge NH.1, inside the area of the truck ban

･ Export Volume in 2015: 58,000tons (2,320 TEUs)

･ Area of Rice Production: Every province but the majority is produced in Batambang Province

･ Export Regions: Europe in the case of Sihanoukville Port, China in the case of Phnom Penh Port

Table 4.51 Khmer Foods Group

Truck Rail

Modal Share to SHV 80% 20%

Transport Cost to SHV $220 $222

(trailer $100, rail $100, Port $22)

Transport Time to SHV 6 hours 11 hours 1hour to ICD

Arrival day and time Saturday morning. Friday morning

Customs Clearance At the port, self-clearance At the port, self-clearance

Source: Study Team

Khmer Food Factory is located inside the area of the truck ban in Phnom Penh. Trucks should wait until 8 pm in the evening to leave for ports. Khmer Foods Group has five special transport passes which make day time transportation inside the city possible but the permission fee is very high.

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Source; Study Team

Figure 4.26 Rice Transport Route

3） Stuffing Rice into Container

Paddy rice is milled to brown rice in the production field and transported to factories in Phnom Penh City. Trucks from the rice field are required to wait outside the city until the truck ban is lifted and must wait again on their return. Accordingly, the number of trucks transporting the rice is limited which drives up the cost. Brown rice is re-milled for exportation in factories. There are two ways to stuff the rice into containers: through the use of 50kg bags or by pouring it into the container. The total weight of rice is limited up to 25 tons per one container; therefore, a 20-foot container is always used for rice exportation. Due to the heavy weight, one trailer can transport only one rice container. After the pest-control process is carried out, container doors are closed and locked by the pin of the shipping company. Containers are transported to the ICD.

4） Rail Transportation of Rice

A train bound for Sihanoukville Port always leaves the ICD at 22:00 and arrives at the port at 9:00. Container cut off time at the port is 14:00 on every Saturday. Rice containers are heavy and are loaded in the bottom of the ship. Rice containers are generally transported to the port on Friday for risk aversion. Therefore, rice

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containers are loaded onto train wagons on Thursday night.

5） Basic Information regarding Train Service

In February 2015, Toll Holdings was acquired by Japan Post but continues to operate as an affiliate company. In 2014, Toll Holdings divested its stake in Cambodia railway to the Royal Group of Cambodia. Royal Group has an O&M contract with Toll Holdings.

As of 31 May 2014, the section from Phnom Penh (9+400) to Sihanoukville had been rehabilitated by the French-based firm TSO but train operation could not achieve the maximum average speed of 50km/h as specified in the rehabilitation specifications. Some of the structures (Bridge, Box Culvert and Pipe Culvert) have been repaired but remain far from a condition that would allow trains to operate at the as-specified speed. Rehabilitation of the container and rail terminal at Sihanoukville has been completed by the Sinohydro Company (Chinese Company) as of the end of 2014. The container train service restarted in 2014 between the TOLL Royal Railway (TRR), Phnom Penh and Sihanoukville Port. This is operated three times per week and the total volume of containers transported by train was 17,770 boxes up to November 2014 (11months).

Table 4.52 South Line Railway Service

Frequency of Container Train 14 Service/week

Capacity of Container Carriage 100TEU Chassis/service

Departure Time from Phnom Penh Arrival time at Sihanoukville

Day of The Week Time Day of The Week Time

Everyday 22:00 Everyday 09:00

Whether or Not of Extra Train Operation Yes

Departure Time from Sihanoukville Arrival time at Phnom Penh

Day of The Week Time Day of The Week Time

Everyday 22:00 Everyday 9:00

Source; Royal Rail of Cambodia (RRC)

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Source; Royal Rail of Cambodia (RRC)

Figure 4.27 Train Service Diagram (up PNH ICD, below SHV port)

Table 4.53 Railway Service Tariff

20 feet 40 feet

Laden Empty Laden Empty

From P.Penh to S.Ville $100 $65 $120 $80

From S.Ville to P.Penh $110 $65 $160 $80 Trailer Cost inside PNH city $80-100 Trailer Cost inside SHV port $22 Source; RRC

Figure 4.28 Railway ICD in Phnom Penh

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Source: MPWT (Upper picture), PASS (Lower picture)

Figure 4.29 Railway Freight Station in SHV port

(3) Experimental Container Train Travel

The JICA expert for MPWT and a surveyor of OCDI took a container train on January 13th, 2015. The train left PNH ICD at 22:15 for SHV port. The total number of wagons was 30 and the total number of containers was 40 boxes with two locomotives; one was in the head and the other was on the tail. The train stopped at Tuk Meas, Kampot, and Veal Rinh to give way to a train moving in the opposite direction. At Kampot station, the train stopped for 1 hour while waiting for two trains headed to PNH. The train arrived at SHV port station at 8:45 on January 14th. It took 10 hours and 45 minutes to travel the total running distance of 247.9 km. Maximum speed was 44km/hour between Veal Rinh and Sihanoukville while the average moving speed was 28km/hour. At surface crossings and bridges, the train is required to slow down for safety reasons.

After the arrival of the train, the reach stacker of PAS discharged the rice containers. The discharge tariff is free but PAS charges $22 for containers marshaled inside the port. Cargo owners have complained that this fee is too high and discourages the use of the rail service. Rice containers are subject to X ray scanning, after which they are placed in the container yard. The scanning price is $20 for 20-ft containers and $40 for 40-ft containers. On the other hand, container trucks form a very long queue on NH 4 waiting to enter the port gate.

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Source; Study Team

Figure 4.30 GPS Survey Result of Container Train to SHV Port

RRC Train Container Depot in Steel Bridge Before Civil War Locomotive Driver

PNH Communicating with OC

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Trains Pass Each Other at Veal Container Train Arrived at SHV Container Trailers Overflow into

Rinh Port SHV city

Source: Study Team

Figure 4.31 Experimental Container Train Survey

4.5 International Logistics Process of Land Transportation

4.5.1 Logistics Process in Thailand

Thailand is already promoting the Electronic Data Interchange (EDI) customs clearance for both imports and exports. In the case of exports to Cambodia, for example, cargo is delivered to the border after completing export customs clearance, and its export information can be confirmed by entering the permit number in a terminal installed at the border customs office. However, it is necessary to bring a copy of the permit.

Table 4.54 Measurement of Export Customs Procedure Time of Thai side

Items Date Time Remark Documents (invoice, packing N-3 days 11:40 list) receipt from shipper. Waiting for the completed Documentation (for input). N-1 days 15:10 document from the shipper. Declaration. N days 10:00 N= ETD. (Documents check). N days 11:00 On queue checking。 Permit. N days 13:00 Transfer export permits information to Cambodian N days 14:00 Logistics company. Document receipt. N days 14:30 Cambodia side.

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Items Date Time Remark Export documents or data N days 16:00 Cambodia side. check.

Source: JICA Study Team.

Table 4.55 Measurement of Export Truck Time of Thai side

Items Date Time Remark

Departure at Bangkok N day 16:00 N= ETD.

Waiting at trucking hub yard then Arrival at Aranyaprathet N+1 days 9:00 departure again in early morning. Thai side. (driver with proper license Exit border procedure for 13:00 to can cross to Cambodia with a immigration 13:30 limitation of distance around 10 km.) Exit border procedure for 13:00 to Thai side. customs 13:30 Entry border procedure at 14:00 to Cambodia side. Poipet 14:30 Departure at border switching area in Departure at evening N+1 days 18:00 the evening.

Source: JICA Study Team.

4.5.2 Logistics Process in Vietnam

In Vietnam, considerable effects were expected with the introduction of the Vietnam Automated Cargo and Port Consolidated System (V-NACCS), based on Japan’s Nippon Automated Cargo and Port Consolidated System (NACCS). However, as far as interview results show, border transport has not been simplified.

Cambodia adopts the “registration customs” system for exports. Shippers need to make an import/export declaration at the customs office where they are located. In the case of imports, therefore, shippers in Ho Chi Minh make an import declaration at Ho Chi Minh Customs and obtain permission to transfer cargo at a border-crossing point. Cargo cannot enter Vietnam without the original of this permit.

In the case of exports, an export permit issued by the registration customs is brought to the border to obtain border-crossing permission. The time schedule from the Cat Lai port in Vietnam to the customs in Bavet border is shown in the Table 4.55. In order that the shipping freight traffic from Ho Chi Minh City to Bavet at the

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border in Cambodia may avoid the traffic congestion in Ho Chi Minh City and the surrounding area, picking up a container early in the morning is generally performed. Therefore, the transporter is standing by at Cat Lai Port from midnight to dawn in order to pick up imported cargo. The target cargo is the transit cargo from a third country. Therefore, the export clearance procedure at the Cambodian boundary is unnecessary, and the necessary procedure is only exchanging B/L for D/O. Cargo that arrives in Cambodia is scanned. After that, the cargo is moved to the So Nguon Dry Port near the Bavet border. In So Nguon Dry Port, the container is transshipped into a Cambodian truck from the Vietnamese truck, and the ASYCUDA is performed for the import declaration procedure. Since the consignee in Cambodia is a QIP company and it is the cargo for ex post facto examination, the report procedure by ASYCUDA might be ended in about 20 minutes. In addition, according to the survey, when dealing with cargo from a company other than a QIP company, the time of report by ASYCUDA and import clearance procedure are completed in about two hours.

Table 4.56 Measurement of Export Truck Time of Vietnam side

Items Scheduled time

Pick up containers at Cat Lai Port (queue for port entry) 14:00

Pick up container and dispatch from Cat Lai 6:00

Arrive at border 10:00

Border crossing at Vietnam border 12:00

Scanning (including waiting time) 13:00-14:00

Arrived So Nguon Dry Port in near Bavet 14:00

ASYUCDIA entry/permit and container transporting 14:00-16:00

Dispatch from dry port 16:00

Source: JICA Study Team.

4.5.3 Import Clearance Flow

(1) Basic Flow (Import Taxation)

The customs clearance process of import taxation is shown in the figure 4.30.

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Source: GDCE, Handbook on Customs Clearance, 2015. Figure 4.32 Basic Flow of Customs Procedure of Import

Taxable goods (after the results of the examination, including the case of no tariff) are first checked for the validity of the declared price (Valuation) at GDCE (Phnom Penh Customs consumption Directorate General). GDCE issues a document called "Import Permit" to the cargo in which the validity was checked. The required documents for Valuation are 1) invoice, 2) packing lists, 3) transportation bonds, 4) contracts, etc.

After acquiring the "Import Permit", an import trader reports by using ASYUCDA at the border and port. After completing scanning and tax payment procedures, it is possible to receive the import cargo. An import trader needs the "Import Permit", an invoice, a packing list, and a customs clearance letter of attorney in customs declaration. Moreover, the test result of scanning is also attached. Customs issues the "Release Note" to the cargo in which import was permitted.

(2) In the case of QIP company

The duty-free importation of raw material is beforehand permitted to the QIP company due to a master list. Therefore, assessment is unnecessary. To be required, an importer needs to submit an invoice, a packing list, etc. to GDCE and to obtain permission from GDCE. However, according to the survey, the procedure mentioned before is omitted. In the import declaration in a customhouse, import cargo is classified into a blue lane and released instances. Blue lane cargo is a posteriori survey goods.

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Source: GDCE, Handbook on Customs Clearance, 2015. Figure 4.33 Basic Flow of Custom Procedure in case of QIP Cargo

(3) In the case of SEZ Company

Companies in SEZ get permission of duty-free importation of raw material like the QIP Company. Therefore, a dutiable-value determination process is omitted. SEZ cargo is classified into two patterns and it is exempted from scanning. 1) In the case of less than 20 km away from the border point, 2) In the case of more than 20km from the SEZ.

1） Less than 20 km

In the case of SEZ cargo (less than 20 km), an importer does not need any documents other than an invoice, a packing list, truck B/L, and for SEZ(s). Cargo reaches SEZ and after unloading, an importer performs report procedure using ASYUCDA.

Source: GDCE, Handbook on Customs Clearance, 2015. Figure 4.34 Basic Flow of Custom Procedure in Case of SEZ (less than 20km) Cargo

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2） More than 20km

In the case of SEZ (more than 20 km) cargo, the importer needs to apply for the transit request document to SEZ customs, and needs to get endorsement from SEZ customs.

It is necessary to show a transit request document to customs. Customs checks the written contents of the transit request document, and the contents of the container. An importer applies the report by using ASYUCD after the arrival of import cargo.

Source: GDCE, Handbook on Customs Clearance, 2015. Figure 4.35 Basic Flow of Custom Procedure in Case of SEZ (more than 20km) Cargo

(4) For Dry Ports

A dry port operator needs to apply for a transit transportation permit to GDCE. The dry port operator needs to present transit transportation to customs, and needs to perform the in bond report from a border to a dry port. It is possible to perform the scanning procedure of cargo in a dry port. An importer performs the report by ASYUCD after dry port arrival of import cargo.

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Figure 4.36 Transit Application for Dry Port Cargo

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Source: GDCE, Handbook on Customs Clearance, 2015. Figure 4.37 Basic Flow of Custom Procedure in case of Dry Port

(5) Best Trader

Thirteen companies, which carry out a great contribution to Cambodia companies, are recognized as the best traders. A best trader has the preferential treatment shown below.

1) Preferential examination

2) Quick examination

3) Exemption of Valuation procedure

4) Report recognition before freight arrival

5) 50% or less of scanning procedure

The License holder of Best Trader is shown the table below.

Table 4.57 List of the License holder of Best Traders

No. Description

1 Sopheak Nika Investment Group Co., Ltd.

2 Minebea (Cambodia) Co., Ltd.

3 Cambodia Beverage Company Ltd.

4 British American Tobaco Cambodia Co., Ltd. 5 Goodhill Enterprise (Cambodia) Ltd.

6 UNT Wholesale Co., Ltd.

7 AEON (Cambodia) Co., Ltd.

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No. Description

8 Toyota (Cambodia) Co., Ltd.

9 Crown Beverage Cans (Cambodia) Limited

10 DKSH (Cambodia) Ltd. 11 Kampot Cement Co., Ltd.

12 Suntex Pte Ltd.

13 Unilever (Cambodia) Limited

Remark: as of 23 Febureary 2016.

4.5.4 Export Clearance Flow

In export clearance, it is necessary to obtain the export admission of GDCE and to make a declaration to the customhouse of the place, which performs container stuffing at first. Next, loading the cargo into a container and a seal is given, and it is carried to the departure point.

It is possible to carry out export clearance institutionally at the border, a port, etc. However, cargo other than rice performs a little export clearance at a port. The export customs clearance is carried out in the factory of clothing and shoes in around Phnom Penh, dry port (Buyer's consolidation), and SEZ. In land transportation, only the check of border transgression is performed on a border point. In a port, it is only checking export clearance being completed.

(1) QIP Company

A QIP company performs an export declaration at the place (a factory, a dry port), which loads cargo. An exporter is checked by both customhouse and Cam control for joint after an ASYUCDA export declaration. And then, container-stuffing work is done. The sealed cargo is conveyed to a border point. The customhouse of a departure point from the country checks the sealed container. After release of a customhouse seal, a container is transshipped to foreign country vehicles after the shipment of cargo.

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Source: GDCE, Handbook on Customs Clearance, 2015. Figure 4.38 flow of QIP export clearance

(2) SEZ

In the export of SEZ, an exporter performs the report by ASYUCUDA to a SEZ customhouse. The sealing of a container is performed with export admission. A container is checked by both customs and a Cam control officer after container stuffing work is done, and a container is sealed. The sealed container is conveyed to a departure point from the country. When cargo leaves a country, first, the check of a container seal is done, next a custom seal is checked, and is then loaded to ship and transshipment on foreign country vehicles.

Source: GDCE, Handbook on Customs Clearance, 2015. Figure 4.39 Basic flow of SEZ export clearance

The items shown in Table 4.57 need to acquire the related documents after loading.

Table 4.58 Necessary documents for Export

Goods Necessary document Authority Export Unprocessed rubber Export license Ministry of commerce license Processed wood and Export license Ministry of commerce non-timber forest Permission letter Ministry of agriculture products forestry and fish Council of ministers Certificate Fresh fruits Vegetables, Custom and excuse permit Custom and excuse house

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Final Report Goods Necessary document Authority plants and agricultural Sanitary and Phytosanitary Ministry of agriculture materials certificate forestry and fish Garment Certificate of origin Ministry of commerce Drugs and medicines Ministry of health certificate Ministry of health

Live animals Aniela health certificate Ministry of agriculture forestry and fish Permission Art and cultural podcasts Permit letter Ministry of culture and fine letters art Fish, crustaceans, Permit letter Certificate of Ministry of commerce mollusks and other origin Ministry of agriculture aquatic products Customs permit forestry and fish Custom and excuse house Jewelry, silverware and Permit letter National bank of Cambodia unprocessed precious stones Source: JICA Study Team.

4.5.5 The Current Condition of ASYCUDA Operation

In the introduction of the Sihanoukville Port in 2008, the introduction of ASYCUDA was installed in Phnom Penh Port, the main border points, and dry ports. ASYCUDA could be used on the main 22 points in 2012. According to customs HP, 87% of the application amount and 87% of trade amount is processed by ASYUCDA.

In April 2015 and afterwards, although ten points are be planned to be installed, the budget is not secured.

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Source: GDCE, Handbook on Customs Clearance, 2015. Figure 4.40 Procedures of Customs Declaration in ASYCUDA

Hereinafter, the procedure flow of ASYCUDA is shown.

･ Declaration.

･ Receipt of a declaration.

･ The document of SAD (Single Administration document) is submitted (it is still not paperless customs clearance).

･ Custom inspection. The custom officer checks the contents of custom application. It is distinguished for the purpose of risk management by Red channel which needs cargo inspection, Yellow channel of documents examination, and Green(automatic permission)/ Blue channel (a posteriori survey being possible) in which an instant release is possible.

･ Inspection is performed according to each channel.

･ Scanning is performed without concerning with each channel.

In the JICA investigation in 2010, there is a room where the ASYCUDA computer is installed in each custom office. A customs broker does input work of custom clearance items. Now, the user became possible being connected on-line to the customs.

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In the TRS (Time Release Survey) in 2013, the inspection time of ASYCUDA is about a maximum of three hours. In this field survey, it is two to three hours for the inspection. On the other hand, the longtime spending until an inspection start is a problem.

Table 4.59 TRS Summary

Cargo arrival to Lodgment to Release to Average time Total lodgment cargo release physical removal Phonom Penh port 6d 09h 02m 0h 03h 25m 0d 02h 40m 6d 15h 08m Sihanoukville port 2d 05h 55m 0d 02h 50m 0d 10h 36m 2d 19h 22m Poipet 0d 18h 22m 0d 01h 57m 0d 00h 52m 0d 21h 11m Bavet 0d 02h 27m 0d 00h 43m 0d 01h 19m 0d 04h 31m Tec Srum dry port 2d 03h 21m 0d 01h 15m 0d 01h 17m 2d 05h 54m Teng Lay dry port 0d 07h 09m 0d 00h 45m 0d 02h 14m 0d 10h 15m

Source: TRS

TRS investigation shows the necessity for the following measure as a time reduction measure.

･ It abolishes printing out SAD and aims at paperless customs clearance.

･ Improvement of DTI system

･ Improvement of best trader system and AEO system

･ Improvement of posteriori registration system

･ Installation of a better risk management system

･ Improvement in the quality of customs broker and export-and-import contractor

The Study Team checked the improvement of the customs clearance system in Vietnam. V-NACCS system was introduced in Vietnam in April 2014. The customs clearance system in land route transportation was changed by this introduction as follows:

･ Examination of import duty was shortened for about two hours because of V-NACCS. (The customs clearance system failure which had occurred frequently was solved, and the report process was stabilized)

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･ Customs clearance data is transmitted to a border customhouse.

･ The prior check about the importer information on a border customs was attained, and quick border passage was realized. In addition, the cargo inspection in border customs clearance of Red channel became possible.

The following is the previous procedure:

･ Import declaration is carried out. (In the import to Ho Chi Minh City, an import declaration is carried out to the customhouse in Ho Chi Minh City)

･ From a border custom to bound transmission permission. Cargo inspection exemption in the border. Transmission permission in a border point is acquired.

･ Original documents, such as in bond transmission permission, an invoice, and a packing list, are brought on the border. Border passage procedure is performed.

･ Waiting for the import permit after in bond transmission in the place of arrival cargo.

Since it became possible from inland customs to transmit data to border customs, lead times including border procedure was reduced. As a result, it became possible for the documents concerning an import declaration to come to hand on the previous day.

However, although the data transmission to border customs has been realized, a paperless process has not been realized. Therefore, a customs broker is required to present a declaration and required documents to the border customs. It is considered for the forwarder charge of Vietnam to be high by the above-mentioned process.3

If a forwarder's procedure cuts down by information cooperation between inland customs and border customs, it is acceptable to expect it to lead to logistics cost reduction even in Cambodia.

3 Although the forwarding charge of Vietnam is about 250 dollars, 50 dollars is a V-naccs report charge. The cost that a forwarder carries documents to the border and performs custom procedure is considered to be 150 dollars, and forwarder's handling fee is the remaining 50 dollars.

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